ECON-CHAPTER 14 - ECON CHAPTER 14 NOTES AND TERMS MONOPOLISTIC COMPETITION WHAT IS MONOPOLISTIC COMPETITION Monopolistic competition is a market

ECON-CHAPTER 14 - ECON CHAPTER 14 NOTES AND TERMS...

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ECON CHAPTER 14 NOTES AND TERMS – MONOPOLISTIC COMPETITIONWHAT IS MONOPOLISTIC COMPETITION? 1. Quality  The quality of a product is the physical attributes that make it different from the products of other firms. o Includes design, reliability, service provided to the buyers, ease of access, etc. 2. Price  Firms that make high quality products can charge a higher price than a firm that makes a lower-quality product. 3. Marketing  Firms use marketing to inform consumers about what makes their product special. o Consists of advertising and packaging Monopolistic competition has no barriers to prevent new firms from entering the industry in the long run. Examples of firms in monopolistic competition include: paint, lighting fixtures, furniture, electronics, bakeries, sporting and athletic goods, plastic bags, clothing, etc.

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