Q19MonopolisticCompetitionOligopoly

Q19MonopolisticCompetitionOligopoly - Market Structure 77...

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1 Market Structure Market Structure Monopolistic Competition many firms free entry differentiated product optimal amount of differentiation differentiation brings in additional revenue differentiation increases costs if the extra revenue is greater than the extra cost, do more variety of goods how products are differentiated physical characteristics convenience location 77 Monopolistic Competition Monopolistic Competition product differentiation market power can charge a higher price and not lose all customers seller faces downward-sloping demand curve Firm Q P Demand curves facing individual firm D 77 Firm Q P Demand curves facing individual firm D D 2 Other firms enter industry Monopolistic Competition demand curve for existing firm shifts with entry or exit demand for firm decreases with entry of another firm market demand is same firm’s share of market demand is smaller 77
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2 demand curve for existing firm shifts with entry or exit
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Q19MonopolisticCompetitionOligopoly - Market Structure 77...

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