Class Notes (837,698)
Canada (510,399)
Economics (951)

Chapter 14 Notes.docx

2 Pages
Unlock Document

Economics 1021A/B
Emilie Rivers

Economics Chapter 14 Lecture Notes Textbook Notes, p324-329 What is Monopolistic Competition?  A large number of firms compete  Each firm produces a differentiated product  Firms compete on product quality, price and marketing  Firms are free to enter and exit the industry -Large Number of Firms  Small market share – each firm supplies a small part of the total industry output, limited power to influence price of its product, price can only be slightly different from competition’s price  Ignore other firms – no one firm can dictate market conditions, no one firm’s actions directly affect the actions of the other firms  Collusion impossible – conspire to fix a higher price, coordination difficult -Product Differentiation  Makes a product that is slightly different from the products of competing firms  Close substitute but not perfect substitute -Competing on Quality, Price and Marketing  Quality – physical attributes, high or low quality  Price – downward sloping demand curve, high quality = high price  Marketing – advertising and packaging -Entry and Exit  No barriers  Positive economic profit  induces entry  lower prices  0 E. profit  Negative economic profit  induces exit  high prices  0 E. profit  0 economic profit in the long run Price and Output in Monopolistic
More Less

Related notes for Economics 1021A/B

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.