ECON 102 Monopolistic Competition
Study online at quizlet.com/_ajq5a
Monopolistic competition: Large number of firms produce similar but not identical products Characteristics of Monopolistic competition (4): many sellers, relativly competitive differentialed products advertising no entry barriers
3. 4. 5. 6. 7. 8. 9.
Product differentiation: distinguishing of products by brand name, color, etc Firm has _______ control over the price: some _____ sloping demand curve: downward _____ differentiation, _____ price control: more, more Results of advertisting: increase demand, differentiate a product, increased profit Marginal revenue of advertisting should equal: Marginal cost of advertisting Individual demand curve is: very elastic Profit is maximized where: MR=MC Short run- it ________ for firms to make profits and losses: is possbile Short run-If price is _____ than average total costs, profits occur: greater Short run-If price is ____ than average total costs, losses occur: less Long run- profits tend to move towards: zero Long run- entry of firms....: decreases demand for one specific firm Long run equilibrium: P=Average Total Cost, zero economic profits Long run- The price is _____ to minimum average total costs: not equal Long run- Monopolist competition has _____ prices and _______ outputs: higher, lower Product differentiation works for firms because: consumers (us) value choices
10. 11. 12. 13. 14. 15. 16. 17. 18. 19.