PGA chapter 11 - Class Econ 150 Section 08 Instructor...

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Class: Econ 150 Section: 08 Instructor: Brother Gumirakiza Group name: PGA Group#6 Date: 27 June 2014 Group members: 1. Garrett Tingle 2. Adam Edwards 3. Trey Fulton Meeting held via Skype From: 12:30 To: 1:00 Chapter 11 - Monopolistic Competition and Oligopoly 1. List the characteristics of monopolistic competition. - Garrett A monopolistic competition has a relatively large number of firms. Each firm has a comparatively small percentage of the total market and consequently has a limited control over the market price. There is also no collusion. There is independent action in a monopolistic competition. This means that with numerous firms in an industry, a firm can make decisions without considering the possible reactions of rival firms. For example, a firm can determine its own pricing without worrying about another firm changing their prices in reaction to theirs. The products in a monopolistic market are differentiated. Product differentiation can consist of; product attributes, service, location, brand names and packaging, and some control over price. Product attributes would be like the iPhone having Siri, where you can speak to the phone. Service would be like Les Schwab tires comp. has popcorn for you to eat and TV to watch while you wait on your car to be finished. Location is key, as Donald Trump strongly believes that location is the most important thing. People will stop at a gas station to get snacks, although they are more expensive than a grocery store, because they are more conveniently located. Brand names and packaging can make a significant difference as well. Yesterday, I
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