Assumptions of monopolistic competition, Managerial Economics

Assumptions of Monopolistic Competition

Monopolistic competition as the name implies, combines features from both perfect competition and monopoly.  It has the following features from perfect competition.

i. There are many producers and consumers.  The producers produce differentiated substitutes.  Hence there is competition between them.  The difference from perfect competition is that the products area not homogeneous.

ii. There is freedom of entry into the industry so that an individual firm can make surplus profits in the short-run but will make normal profits in the long-run as new firms enter the industry.

Posted Date: 11/28/2012 5:27:49 AM | Location : United States







Related Discussions:- Assumptions of monopolistic competition, Assignment Help, Ask Question on Assumptions of monopolistic competition, Get Answer, Expert's Help, Assumptions of monopolistic competition Discussions

Write discussion on Assumptions of monopolistic competition
Your posts are moderated
Related Questions
Problem: (a) (i) Assuming that a household uses a subjective discount rate of 10%, calculate the amount that she must spend on consumption per annum during her years of existe

Problem: (a) Explain with the help of a diagram, the effect on a consumer's equilibrium, of an increase in the price of commodity X while the consumer's money income and price

FACTORS AFFECTING THE ABILITY OF TRADE UNIONS TO GAIN LARGER WAGE INCREASES FOR ITS MEMBERS The basic factor is elasticity of demand for the type of labour concerned.  The ela

a) A reduce in supply and an enhance in demand will cause the equilibrium:   b)  Which of the following is most likely to cause a reduce in the present demand for  some product X

Profit as rent of ability: one of the most widely known theories of profit was propounded by F.A. Walker. According to him profit is the rent of is the difference between the earn

"Inflation is not possible under the gold standard." Is this declaration true, false, or uncertain? Describe your answer


What are the important external forces Management has to identify all significant factors which influence a firm. These factors can largely be divided into two categories. Mana

The Frugal Economy In the Frugal economy, households and firms look to the future, and as a result undertake both Saving and Investment. SAVING Saving is income no

williamson''s model describe