ECON 1050 Chapter Notes - Chapter 14: Monopolistic Competition, Marginal Cost, Perfect Competition

119 views4 pages

Document Summary

Monopolistic competition is a market structure in which: large number of firms compete, each firm produces a differentiated product, firms compete on product quality, price, and marketing. No one firm can influence the price of the price of a product because each firm supplies a small part of the total industry output. Each firm must be sensitive to average market price of the product, not another competitors price. Not possible for all firms to band up and raise price because there"s too many firms. Product differentiation is when a firm makes a product that is slightly different than the products of competitors. Quality is physical attributes that make a firm"s product distinct. Marketing that suits the price and quality to make product worth buying. Monopolistic competition has no barriers to prevent entry. Each firm in monopolistic competition produces the profit maximizing quantity just like a monopoly does. Profit maximizing might be loss minimizing in short run.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related Documents

Related Questions