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L13- Monopolistc Comp

L13- Monopolistc Comp - ComparingPerfect&Monop.Competition...

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Comparing Perfect & Monop. Competition yes none, price-taker firm has market power? downward- sloping horizontal D curve facing firm differentiated identical the products firms sell zero zero long-run econ. profits yes yes free entry/exit many many number of sellers monopolistic competition perfect competition
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Comparing Monopoly & Monop. Competition yes yes firm has market power? downward- sloping downward- sloping (market demand) D curve facing firm many none close substitutes zero positive long-run econ. profits yes no free entry/exit many one number of sellers monopolistic competition monopoly
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Comparing Oligopoly & Monop. Competition high low likelihood of fierce competition low high importance of strategic interactions between firms many few number of sellers monopolistic competition oligopoly
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Managing a Monopolistically  Competitive Firm Like a monopoly, monopolistically competitive firms have market power that permits pricing above marginal cost.
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