Case Study 2

In a competitive market, firms are unable to increase their prices above equilibrium

without losing at least some customers. In reality, we know that this is often not the case.

Clothing brands, for example, can sell items for much higher than what they cost to make,

whereas other firms that are selling similar products at a lower price struggle to get by. This is in

part due to the number of firms in a market and in a firm’s ability to distinguish its products from

its competitors. What type of imperfect competition do you think is the best pick for companies

to excel in the competitive market?