ECON 111 Lecture Notes - Lecture 11: Monopolistic Competition, Market Power, Perfect Competition

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ECON 111 Lecture Notes - Lecture 10: Deadweight Loss, Predatory Pricing, Monopolistic Competition

ECON 111 Lecture Notes - Lecture 11: Monopolistic Competition, Market Power, Perfect Competition

ECON 111 Lecture Notes - Lecture 12: Autarky, Free Trade, Comparative Advantage

Document Summary

Market structures: monopoly and perfect competition can be though of as the 2 extremes of market structures, there are many kinds of market structure that lie between, can be separated on many dimensions such as. Form of competition over quantity, price, products, product quality, advertising. Assumptions/conditions of monopolistic competition: each firm is a monopolist in its own product, there are many close substitutes, free entry and exit into the industry. Price maker: monopolistic company that can dictate prices of its goods because there are no substitutes for it. Single price monopolist: single firm serving the entire market, sells its output for one price. Marginal and average revenue: since the firm serves the entire market, it knows that its output decision affects the market price, not a price taker but price maker, the firm"s demand is the market"s demand. Declining lrac over the range of the market. Referred to as natural monopoly: created.

Related Questions

21)

Compared to the results in a perfectly competitive market, a monopoly does which of the following?

	It charges a higher price.
	It charges a price greater than the marginal cost.
	It produces less output.
	All of the above
	None of the above

22)

"X-inefficiency" refers to the idea that

	government restrictions on competition create a monopoly, which results in inefficiency.
	the cost of rent-seeking activity should be added to the welfare cost of monopoly.
	Generation X is less efficient due to a lack of competitive spirit.
	a lack of competitive pressure results in a monopoly not keeping its costs down to the lowest possible level.
	price discrimination results in inefficiently low cross-elasticities of demand.

23)

Firms in which of the following market structures can engage in price discrimination?

	monopoly
	oligopoly
	monopolistic competition
	All of the above
	None of the above

24)

Monopolistic competition and perfect competition are in all of the following ways except

	Barriers to entry are low in both
	There are many firms in both
	Firms in both produce the output level where MR=MC
	Nonprice competition is important in both

25)

To get rid of excess capacity from the monopolistic competition in the long run, what would have to be given up?

	Free entry and exit.
	economic rent
	resource allocative efficiency
	differentiated product
	productive efficiency

taupeant454

The text summarized the monopolistic competition as follows:

"Monopolistic competition refers to a market where many firms sell differentiated products. Differentiated products can arise from characteristics of the good or service, the location from which the product is sold, intangible aspects of the product, and perceptions of the product."

Think about a small business you might enjoy opening. Typical examples might be a restaurant, specialty clothing store, or professional service. Assume that it will be in a monopolistically competitive market structure. How will you specifically differentiate your product from others in the market? Please be as descriptive as possible and list any references you may use.

greencaribou600

1. A monopoly market structure is characterized by

a. large number of firms, standardized products, easy entry and exit.

b. large number of firms, differentiated products, easy entry and exit.

C. small number of firms, standardized or differentiated products, difficult entry.

d. one firm, a unique product without close substitutes, and impossible entry.

e. one firm, differentiated product, impossible entry.

2. Which of the following is not a characteristic of monopolistic competition?

a. Differentiated products

b. A downward-sloping demand curve for individual firms

c. Firms that are price makers

d. Impeded entry into the industry

e. A large number of firms

3. One factor that distinguishes oligopoly from other market structures is

a. the ease of entry into the market.

b. the interdependence of firms.

c. the slope of the demand curve.

d. the degree of product differentiation.

e. the amount of advertising expenditures.

lavenderbat941

ECON 111 Lecture Notes - Lecture 11: Monopolistic Competition, Market Power, Perfect Competition

ECON 111 Lecture Notes - Lecture 10: Deadweight Loss, Predatory Pricing, Monopolistic Competition

ECON 111 Lecture Notes - Lecture 11: Monopolistic Competition, Market Power, Perfect Competition

ECON 111 Lecture Notes - Lecture 12: Autarky, Free Trade, Comparative Advantage

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