Ch-1. 16 Monopolistic Competition

Ch-1. 16 Monopolistic Competition - Ch 16 What is...

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Ch. 16 What is monopolistic competition? A market structure in which: A _______ number of firms compete. Each firm produces a _____________ product. _________ campaigns and other __________ efforts are important to the success of the firm. Firms find it _____ to ______ and ______ the market.
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Monopolistic Competition in between Competitive Markets (ch.14) and Monopoly (ch. 15) Monopolistic Competition  similar  to  Competitive  Markets  in the following ways:  • Each firm is a small part of the market • Each firm’s choices of quantity are independent  of other firms’ choices • No (or very low) barriers to entry 
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In between Competition (ch.14) and Monopoly (ch. 15) Monopolistic Competition  different from  Perfect  Competition  in the following ways:  • Products from different firms are not  “perfect”  substitutes   close but not the same. • Each firm is not  a price taker….but each firm  does face some competition from similar  substitutes, so each firm needs to be aware of the  average price in their market
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Compare MC to Monopoly ?
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