ECON-1020 Chapter Notes -Perfect Competition, Monopolistic Competition, Marginal Cost
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12 May 2022
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Monopolistically competitive market: an industry with many competitors, all producing slightly different products. A variety of types of products, each one slightly different. Lots of information about buyers and other sellers. 11. 3 short-run equilibrium in a monopolistically competitive industry. Average cost and marginal cost curves are similar shapes as for perfectly competitive firms. Costs may be higher for monopolistically competitive firms because advertising. Real difference between perf. competition and mono. competition is the demand curve. A monopolistically competitive firm may have some market power in that it can raise its price and because it produces a unique product, some buyers will continue to purchase the product. Max. profits by producing level of output where mr = mc. 11. 4 long-run equilibrium in a monopolistically competitive industry. Ex: if in-n-out is doing really well in a neighborhood, domino"s and chipotle might open up stores there as well .
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