Features of monoploy in monopolistic competition, Managerial Economics

Features of Monoploy in Monopolistic Competition

Monopolistic competition has the following features from monopoly:

As the products are differentiated substitutes, each brand or type has its own sole seller e.g. each brand of toilet soap is produced by only one firm.

If one firm raises its price it is likely to lose a substantial proportion of its customers to its rivals.  If it lowers price it is likely to capture a proportion of customers from its rivals.  But in the first case some of its customers will remain loyal to it and in the second case some customers will remain loyal to their traditional suppliers.  Hence, as in monopoly the demand curve for the firm slopes downwards but it is more elastic than in monopoly.  Thus the revenue for the firm in monopolistic competition is as follows:

385_monopolistic competition.png

Posted Date: 11/28/2012 5:30:09 AM | Location : United States







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

Write discussion on Features of monoploy in monopolistic competition
Your posts are moderated
Related Questions
1. Prof. Marshall 'The more nearly perfect a market is, the stronger is the tendency for same price to be paid for same thing at the same time in all parts of the market". 2. Pr

Relevance of The Law of Diminishing Returns The law of diminishing returns is important in that it is seen to operate in practical situations where its conditions are fulfille

Provide two examples of identity economics other than those given in the article

Q. What is Technical Economies? The significant technical economies result from the use of specialised capital equipment that comes into effect only when output is produced on

Price Elasticity of Demand and the slope of the Demand Curve Elasticity determines the shape of the demand curve. From the formulas

what is market

Illustrate the application of economic theory to some business problems

Theories associated with different market structures A firms profit maximising output decisions take into account the market structure under that they operate. There are 4 type

factors affecting demand forecasting

SEARCH THEORIES  -  A BRIEF' HISTORICAL OVERVIEW   A search theory of unemployment is found even in the writings of A. C. Pigou in  the inter-war  period. To explain the  high