Business Plan

(a)The cost of buying a new head office for a firm that sells oranges in a perfectly competitive market has increased by 2%. What will happen to the price of oranges and the profit maximising quantity of oranges as a result, and why? (12 marks) (b)Why might governments allow the creation of monopolies via patent protection, despite the other negative effects of monopolies? Provide a brief answer of up to a maximum of 100 words. (13 marks)