Some Hints:

To help you with your analysis, you may wish to consider the following points:

• Question 1. What type of market structure would a particular restaurant be in? What factors would influence your answer?

You will need to think about the market in which the restaurant sits; is it in a market with all restaurants or is the fact that it has tried to differentiate itself mean that it is in a part of the overall market for eating out? If it is the former, then you would have to consider McDonald's, for example, as being a rival to «Fifteen» - how appropriate is that?

You might, therefore, conclude that the restaurant sits in a small market consisting of high-price, high-quality restaurants. If that is your conclusion, the market structure might be quite different and as such, the behaviour and the short and long run outcomes equally so.

When you are considering your answer, think about the characteristics of the market structure you think it might be in and try to identify how closely those characteristics match with the restaurant industry.

• Question 2 should be relatively straightforward; there are clues in the text about this - think about location, ambience, character, price, quality, service, etc.

• Question 3 is seeking to assess your understanding of the subtleties involved when discussing monopoly power.

Firms such as Microsoft may be big enough to wield monopoly power in fairly obvious ways - although they might claim that they are not, which is an interesting discussion in itself - but small firms can also exercise monopoly power. It may tend to be localized in nature. You will have to explain what the source of the monopoly power is and how it might exercise that power.

If you have done this successfully then you will be able to explain what the consequences of such monopoly power might be. The key part of this question are the command words «to what extent», which is requiring you to make a judgment. In this case, you are expected to judge whether «Fifteen» is able to exercise strong monopoly power, some monopoly power in limited circumstances or hardly any at all. The answer will depend to a large extent on how you have classified the market structure. Remember to support your judgments with reference to the analysis you have made previously.

• Question 4 takes the issue above one stage further and suggests «Fifteen» might be regarded as an oligopoly.

In this case, it will be assuming that there are a small number of restaurants in the market who can exercise a degree of control over the industry - the industry in this case being high value, high quality, exclusive restaurants.

• Question 5 then takes the above discussion and gives you the opportunity of assessing how collusive behaviour could be organized.

Think of location, pricing, possibly what types of food they serve, and so on. When considering the costs and benefits the obvious point is to think of the impact on long-term profit levels but you are also asked to think about the problems associated with collusive behaviour - will everyone stick to the agreements, for example?

• Question 6. This question asks you to consider ways which «Fifteen» could regain its position in the market - the text again gives some suggestion that they have already taken steps to this end.

Think of the problems the guide highlighted and what steps the business could take to overcome these weaknesses. Avoid just saying bland things such as «they can improve quality». If you do think this is a way forward, explain how a restaurant can increase quality. This takes your answer to another level! The command word, again, is important. You must evaluate, so if you think quality is important, you must balance this against other measures you have identified to make a judgment as to whether quality is more or less important and why.