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They have the potential to become a household name brand. They also will usually be cheaper, or have unique products.
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In general monopolistically competitive frims earn profits?
The general monopolistically competitive firm does earn profit. They earn point about as much as oligopolies.
Monopolistically competitive firms may not be able to produce goods at the lowest possible average cost. This statement is describing how monopolistically competitive firms might be?
without economies of scale
Should a monopolistically competitive firm take into account it's fixed costs when deciding how much to produce?
No. A monopolistically competitive firm should produce up to the point where marginal revenue equals marginal cost.
Is a Monopolistically competitive firm productively efficient?
No because it does not produce at minimum average total cost
Monopolistically competitive firms are typically characterized by?
many firms selling products that are similar, but not identical.
A firm in a monopolistically competitive market is similar to a monopolist in the sense that it?
faces a downward-sloping demand curve
Does monopolistically competitive firms have horizontal marginal cost curve?
No it does not. Only Perfectly Competitive firms have a horizontal Marginal Cost curve, which is also there demand curve.
What happens to a monopolistically competitive firm that begins to charge an excessive price for its product?
Consumers will substitute with a rival's product.
What happens to a monopolistically competitive firm that begins to charge an excessive price for its products?
Consumers will substitute with a rival's product.
What happens to monopolistically competitive firm that begins to charge an excessive price for its product?
Consumers will substitute with a rival's product.
What happens to a monopolistically competitive firm that begins to charge an excessive price for it's product?
Consumers will substitute a rival's product.
Classify the following markets as perfectly competitive monopolistic or monopolistically competitive and explain your answers 1 Wooden pencils 2 copper 3 local telephone service?
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