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
Demand Schedule The law of demand can be explained through a demand schedule. A demand schedule is a series of quantities that consumers would like to buy per unit of time at d

The Microeconomic objectives of government These are the policies which are concerned with the allocation and distribution of resources to maximize social welfare. 1. Allo

A risk-neutral agent's working life has two periods. In each period, the agent can provide high effort (at personal cost $2,000) or low effort (at zero personal cost). In a given p

Equilibrium in a single market model A single market model has three variables: the quantity demanded of the commodity (Q d ), the quantity supplied of the commodity (Q s ) an

REASONS FOR FLUCTUATIONS IN AGRICULTURAL PRICES Production depends on factors beyond the control of the producers e.g. weather, disease and pests.  Actual and planned output i

What will be the table of total cost function?

The  fez is the typical Arabic hat in the shape of a short red cylinder. Historians believe it was manufactured in the city of Fes, in Morocco, during the 17 th century. It has be

fundamental concepts of decision-making theory The fundamental concepts of decision-making theory have been culled from microeconomic theory and have been furnished with new t

APPROACHES TO MEASURING NATIONAL INCOME The compilation of national income statistics is a very laborious task.  The total wealth of a nation has to be added up and there are

define scarcity and oppurtunity cost.show how these concepts are useful in managerial decision making