Monopolistic Competition
Definition
Monopolistic competition refers to a market structure where there are many sellers offering differentiated products that are similar but not identical. Each firm has some degree of control over its own pricing.
Analogy
Think of monopolistic competition like different flavors of ice cream at an ice cream shop. There are many flavors available, each with its own unique characteristics, but they all fall under the category of ice cream.
Related terms
Product Differentiation: Product differentiation refers to making your product appear distinct from others in order to attract customers in monopolistic competition.
Branding: Branding involves creating a unique image and identity for your product or company through marketing strategies.
Non-price Competition: Non-price competition occurs when firms compete based on factors other than price, such as quality, branding, advertising, or customer service.
"Monopolistic Competition" appears in:
Study guides (4)
Additional resources (2)
Practice Questions (13)
- Which of the following is a characteristic of monopolistic competition?
- In monopolistic competition, firms have a certain degree of market power because they can:
- In monopolistic competition, firms can earn economic profits in the short run if:
- Which of the following is a strategy commonly used by firms in monopolistic competition to differentiate their products?
- In monopolistic competition, firms may engage in non-price competition because:
- Which of the following is a potential long-run outcome of monopolistic competition?
- In monopolistic competition, firms can enter or exit the market in the long run due to:
- Which of the following is a characteristic of monopolistic competition that distinguishes it from perfect competition?
- Firms in monopolistic competition have some degree of market power because they:
- In monopolistic competition, firms may engage in product development and innovation to:
- Which of the following is a characteristic of monopolistic competition in the short run?
- Which of the following best represents the product differentiation in monopolistic competition?
- In the long run, firms in monopolistic competition tend to:
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