MICROECONOMICS
21st Edition
ISBN: 9781260229431
Author: McConnell
Publisher: MCG
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Question
Chapter 13.1, Problem 4QQ
To determine
Long run profit.
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Which of the following is a requirement for both perfect competition and monopolistic competition?
a) Consumers have all accurate information about firms, product and prices
b) these are low barriers to enter and exit the market
c) all firms sell the exact same product
d) the producers have absolutely no control over the price they cha
Product differentiation is the main difference between perfect competition and monopolistic competition. Discuss what product differentiation is. Provide an example (and explanation) of a product or service that operates in a monopolistic competition environment. Why do companies try to differentiate their products?
There are many sellers of abayas and dishdashas in Muscat. Each abaya and dishdasha seller makes their product slightly different from others. There is free entry and exit into this market. Which market structure is this situation referring to?
a.
Perfect Competition
b.
Monopoly
c.
Oligopoly
d.
Monopolistic Competition
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- why is the restaurant industry is often used as an example of the market structure of monopolistic competition. How does this affect the long and short run? address all aspects and assumptions of the model of monopolistic competitionarrow_forwardConsider perfect competition and monopolistic competition. In which market structure(s) will we see price equal to marginal cost at the last unit produced in the long-run equilibrium? a perfect competition b monopolistic competition c both perfect and monopolistic competition d neitherarrow_forwardThe characteristics of perfect competition and imperfect competition (monopolistic competition, oligopoly, and monopoly). Barriers to entry don't exist for perfect competition, but barriers to entry exist for imperfect competition. What are the implications of barriers to entry to the firm and competition? What happens to consumer surplus is price is above equilibrium, or in this case above normal profits?arrow_forward
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