SENIOR HIGH SCHOOL Applied Economics Market Structure: Monopolistic Competition Self-Learning

Module 14 666 Quarter 3 Applied Economics Quarter 3 – Self-Learning Module 14: Market Structure:
Monopolistic Competition First Edition, 2020 Republic Act 8293, Section 176 states that no copyright
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Department of Education - Schools Division of Pasig City Printed in the Philippines by Department of
Education – Schools Division of Pasig City Development Team of the Self-Learning Module Writer:
Emmanuel B. Penetrante Editor: Edna D. Camarao, PhD Reviewers: Content/Language: Edna D.
Camarao, PhD, Dennis T. Alex, Hedelita B. Calonia Technical: Emmanuel B. Penetrante Illustrator: Name
Layout Artist: Name Management Team: Ma. Evalou Concepcion A. Agustin OIC-Schools Division
Superintendent Aurelio G. Alfonso EdD OIC-Assistant Schools Division Superintendent Victor M. Javeña
EdD Chief, School Governance and Operations Division and OIC-Chief, Curriculum Implementation
Division Education Program Supervisors Librada L. Agon EdD (EPP/TLE/TVL/TVE) Liza A. Alvarez
(Science/STEM/SSP) Bernard R. Balitao (AP/HUMSS) Joselito E. Calios (English/SPFL/GAS) Norlyn D.
Conde EdD (MAPEH/SPA/SPS/HOPE/A&D/Sports) Wilma Q. Del Rosario (LRMS/ADM) Ma. Teresita E.
Herrera EdD (Filipino/GAS/Piling Larang) Perlita M. Ignacio PhD (EsP) Dulce O. Santos PhD
(Kindergarten/MTB-MLE) Teresita P. Tagulao EdD (Mathematics/ABM) Applied Economics SENIOR HIGH
SCHOOL Market Structure: Monopolistic Competition Quarter 3 Self-Learning Module 14 Introductory
Message For the facilitator: Welcome to the Senior High School – Applied Economics Self Learning
Module on Market Structure: Monopolistic Competition! This Self-Learning Module was collaboratively
designed, developed and reviewed by educators from the Schools Division Office of Pasig City headed by
its Officer-in-Charge Schools Division Superintendent, Ma. Evalou Concepcion A. Agustin, in partnership
with the City Government of Pasig through its mayor, Honorable Victor Ma. Regis N. Sotto. The writers
utilized the standards set by the K to 12 Curriculum using the Most Essential Learning Competencies
(MELC) in developing this instructional resource. This learning material hopes to engage the learners in
guided and independent learning activities at their own pace and time. Further, this also aims to help
learners acquire the needed 21st century skills especially the 5 Cs, namely: Communication,
Collaboration, Creativity, Critical Thinking, and Character while taking into consideration their needs and
circumstances. In addition to the material in the main text, you will also see this box in the body of the
module: As a facilitator you are expected to orient the learners on how to use this module. You also
need to keep track of the learners' progress while allowing them to manage their own learning.
Moreover, you are expected to encourage and assist the learners as they do the tasks included in the
module. Notes to the Teacher This contains helpful tips or strategies that will help you in guiding the
learners. For the learner: Welcome to the Applied Economics Self Learning Module on Market Structure:
Monopolistic Competition! This module was designed to provide you with fun and meaningful
opportunities for guided and independent learning at your own pace and time. You will be enabled to
process the contents of the learning material while being an active learner. This module has the
following parts and corresponding icons: Expectations - This points to the set of knowledge and skills
that you will learn after completing the module. Pretest - This measures your prior knowledge about the
lesson at hand. Recap - This part of the module provides a review of concepts and skills that you already
know about a previous lesson. Lesson - This section discusses the topic in the module. Activities - This is
a set of activities that you need to perform. Wrap-Up - This section summarizes the concepts and
application of the lesson. Valuing - This part integrates a desirable moral value in the lesson. Posttest -
This measures how much you have learned from the entire module. After going through this module,
you are expected to: 1. define monopolistic competition; 2. describe the characteristics of monopolistic
competition; and 3. determine the pricing power of monopolistic competition. Directions: Read each
statement carefully. Choose the letter of the best answer and write it on a separate sheet of paper. 1.
Monopolistic competition occurs when an industry has many firms offering products that are similar but
not identical. A. The statement is correct. B. The statement is wrong. C. The statement is sometimes
correct. D. The statement is sometimes wrong. 2. Monopolistic competition is a combination of the
characteristics of ____. A. oligopoly and perfect competition B. perfect competition and monopoly C.
monopoly and oligopoly D. none of the above 3. The kind of products offered in a monopolistic
competition. A. homogenous B. differentiated C. identical D. none of the above EXPECTATIONS PRETEST
4. The price taker in the monopolistic competition. A. Seller B. Buyer C. Market demand and supply D.
None of the above 5. The price maker in the monopolistic competition. A. Seller B. Buyer C. Market
demand and supply D. None of the above Directions: Describe the perfect competition according to the
following characteristics. 1. Number of Sellers -
_________________________________________________________
_________________________________________________________. 2. Type of products -
_________________________________________________________.
_________________________________________________________ 3. Entry/exit to market -
______________________________________________________
______________________________________________________. 4. Price Power -
_______________________________________________________________
_______________________________________________________________. RECAP Previously, we
have discussed one of the market structures which is very typical in the Philippine market – the perfect
competition. Sari-sari store and other micro and small businesses are present in the perfect competition.
For today’s topic, we will discuss another market structure which is monopolistic competition. This
market structure is part of the imperfectly competitive market. An imperfect market is one in which
individual buyers and sellers can influence prices and production, where there is no full disclosure of
information about products and prices, and where there are high barriers to entry or exit in the market
(Kenton, 2020). Monopolistic Competition Monopolistic competition is characterized as an industry in
which many firms offer products or services that are similar, but not exactly alike – differentiated in
nature. As consumers, we want to have varieties of products to choose from. We have the choice to buy
the product in terms of the quality, features, packaging, and even because of its brand name.
Characteristics of Monopolistic Competition 1. It is a blend of perfect competition and monopoly. Just
like perfect competition, there are many similar products available in the market and there are many
large companies which they can influence the price by creating a product identity. 2. The firms sell
differentiated products which are highly substitutable but are not perfect substitutes. Products are not
identical, but very similar, so companies use product differentiation. Let say, shampoo products, there
are many variants of shampoo to choose from like for hair straightening, anti-dandruff, smooth and silky
hair. Product differentiation is a marketing strategy that strives to distinguish a company's products or
services from the competition (Kopp, 2020). The product differentiation may be in color, packaging,
store location, store design, store decorations, delivery, service, or anything to make the product stand
out. Brand identity is one of the selling point of the firms in a monopolistic competition. 3. There are
free entry and exit in the market that enables the existence of many sellers. 4. The firms are engaged in
non-price competition. This involves the advertising of a product’s appearance, quality, or design which
takes to shift the demand curve to the right without sacrificing the prices. 5. It is similar to a monopoly in
which the firm can determine the quantity of the products and has some price control. LESSON Activity
1: Describe the Market Directions: Complete the table by providing the characteristics of monopolistic
competition. Activity 2: Market Structure Directions: Illustrate at least 5 brands or products that are
present in monopolistic competition. You may use the space below. Number of Sellers Type of products
Entry/exit to market Pricing power ACTIVITIES To summarize what you have learned in the lesson,
answer the following questions: 1. What is monopolistic competition? 2. What are the characteristics of
monopolistic competition? 3. Who determines the price in monopolistic competition? Reflect on this!
“Your most unhappy customers are your greatest source of learning” – Bill Gates Directions: Read each
statement carefully. Write T if the statement is correct, otherwise write F. ____________1. Monopolistic
competition tends to lead to heavy marketing because different firms need to distinguish broadly similar
products. ____________2. Monopolistic competition is a form of competition that characterizes several
industries that are familiar to consumers in their day-to-day lives. ____________3. Monopolistic
competition is a middle ground between monopoly and perfect competition. ____________4. Sellers
are the price takers in the market. ____________5. Firms in monopolistic competition typically try to
differentiate their product to achieve and capture above market returns. WRAP-UP VALUING POSTTEST
References About Ashley Sefferman Ashley Sefferman Is Head of Content at Apptentive. A Digital
Communication and Content Strategy Enthusiast. "16 Product Management Quotes to Leave You
Inspired." Apptentive. March 19, 2020. Accessed July 28,
2020.https://www.apptentive.com/blog/2018/10/11/16- product-management-quotes/. Dinio, R. and
Villalis, G. Applied Economics. Rex Book Store, Inc. Sampaloc, Manila, 2017. Chappelow, Jim.
"Monopolistic Competition Definition." Investopedia. April 07, 2020. Accessed July 28, 2020.
https://www.investopedia.com/terms/m/monopolisticmarket.asp. Kenton, Will. "Imperfect Market: An
Inside Look." Investopedia. February 05, 2020. Accessed July 28, 2020.
https://www.investopedia.com/terms/i/imperfectmarket.asp#:~:text=An imperfect market is one,or exit
in the market. Kopp, Carol M. "Understanding Product Differentiation." Investopedia. July 19, 2020.
Accessed July 28, 2020. https://www.investopedia.com/terms/p/product_differentiation.asp. POSTTEST:
1. T 2. T 3. T 4. F 5. T