Professional Documents
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Monopolistic Competition
Monopolistic Competition
Presented By:
Aasim Mushtaq
Monopoly
Monopoly
3) Barriers to entry
Monopoly
TC
If the monopolist in the
product market faces a
perfectly competitive input TVC
market, then it can not affect
input prices.
C
o
s
t
TFC
In that case, the concept of
cost curves do not change.
AFC
Output
Profit Maximizing Output Decision
under Monopoly in the Short-run
Product Differentiation
Firms in monopolistic competition practice
product differentiation, which means that
each firm makes a product that is slightly
different from the products of competing
firms.
Entry and Exit
There are no barriers to entry in
monopolistic competition, so firms cannot
earn an economic profit in the long run.
Oligopoly :
few sellers
either homogeneous or a
differential product
difficult market entry