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
Enumerate the Scope of managerial economics The scope of managerial economics contains following subjects:  1. The Theory of demand 2. The Theory of production 3. The

demand function is q=4850 - 5p(1) + 1.5p(2) + 0.1 Y WHEN Y=10000 p(1)=200 p(2)= 100 find income elasticity of demand for p(1)

Properties of Indifference Curves An indifference curve is usually convex to the origin. Indifference curves slope downwards from left to right. A set

Blowing Safety Co. P/L manufactures safety parachutes for the airline industry. These are sold directly to the airline companies. Management expects to manufacture and sell around

Q. What is Labour Requirements on the production capacity? Labour Requirements: Spending on labour is one of the most vital elements of cost of production. Dependable and cor

Marginal Revenue (MR) This is the increase in Total Revenue resulting from the sale of an extra unit of output.  Thus, if TR n-1 is Total Revenue from the sale of (n-1) units

a)      The production-possibilities curve is? b)      If there is a shortage in the provider of a product, we can conclude that its price: c)      An enhance in supply and a


the demand for widgets(x) is given by: px=160 -4x the production of widget has the following average variable cost: Avc=2x-20 fixed cost are 162 calculate the output level of widg

Classification of oligipoly