Chapter 17 Lecture Outline - Economics 101H Vandan Desai...

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Economics 101H Vandan Desai Chapter 17: Monopolistic Competition (Lecture Outline) -------------------------------------------------------------------------------------------------------------------------- Imperfect competition —refers to those market structures that fall between perfect competition and pure monopoly Types of Imperfectly Competitive Markets o Monopolistic Competition many firms selling products similar , but not identical o Oligopoly —only a few sellers, each offering a similar or identical product to others Monopolistic Competition —markets that have some feature of competition and some features of monopoly o Many sellers s There are many firms competition for the same group of customers s Product examples include: books, CDs, movies, computer games, restaurants, piano lessons, cookies, furniture, etc o Product differentiation s Each firm produces a product that is at least slightly different from those of other firms s Rather than being a price taker, each firm faces a downward-sloping demand curve o Free entry and exit s Firms can enter or exit the market without restriction s The number of firms in the market adjusts until economic profits are zero I. Competition with Differentiated Products A. The Monopolistically Competitive Firm in the Short Run i. Short-run economic profits encourage new firms to enter the market
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This note was uploaded on 10/31/2010 for the course ECON 202 taught by Professor - during the Fall '08 term at Community College of Baltimore County.

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Chapter 17 Lecture Outline - Economics 101H Vandan Desai...

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