Monopolistic Competition - Microeconomics Dropbox...

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Microeconomics Dropbox Assignment Week Five Monopolistic Competition Gerardo Sanchez ECON294D: Microeconomics Professor: Alan Traverse October 1, 2016
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Monopolistic Competition In today’s fast food market structure, monopolistic competition is a very common practice because it is a market in which a great number of companies have similar merchandise but with a slightly different taste and texture that attracts different customers. What makes monopolistic competition unique and attractive to many companies is that it is a relatively easy market structure to get in. The fast food industry is a prime example of monopolistic competition because it is an industry that is similar but not identical, and with a fast food restaurant popping up on every corner this leads me to believe that it is a relatively easy market structure to get into. According to Miller, a large number of small businesses function under settings of monopolistic competition, including independently owned and operated high-traffic restaurants. In the case of fast food restaurants, each one offers some product that has an element of uniqueness, but all are fundamentally fighting for the same customers (2016). The market structure selected for this paper is the fast food industry because they are abundant and every chain is unique but all are trying to gain the same customers’ attention. The key to product differentiation is that consumers have diverse preferences and that each manufacturer can get a fragment of a market niche by making something that satisfies the needs and preferences of some group of consumers better than the competition. Thus, there are three important methods of product
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