1. (10 marks) You own a small business servicing the Sandy Bay area. Assume that

your business is the only one offering the service you sell and so operate as a

monopolist. You are considering spending on advertising to increase the demand

for your service. Use the appropriate diagram(s) to investigate potential changes

in profits, prices and quantity from a change in demand caused by the advertising

campaign (7 marks). Using a diagram, characterise how much you would be

willing to spend on advertising given a change in demand (3 marks).