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A firm in a monopolistically competitive market is similar to a monopolist in the sense that it?
Wiki User
∙ 10y ago
faces a downward-sloping demand curve
Wiki User
∙ 10y ago
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Why is the demand curve facing a monopolist less elastic than one facing a firm that operates in a monopolistically competitive market?
In a monopoly, the monopolist company is the only product in the market place. However, a company competing in a monopolistically competitive market has multiple "similar" competitors that all try and differentiate themselves with specialized or additional services; i.e. the Italian restaurant serving food only from northern Italy. These companies may be a monopoly in the sense that their niche product is one-of-a-kind, but there are substitute products that can replace them if their price becomes too high to the consumer. As a result, the firm in a monopolistically competitive has a more elastic demand than a true monopolist.
The demand curve for a monopolist differs from the demand curve faced by a competitive firm?
The pure monopolist's market situation differs from that of a competitive firm in that the monopolist's demand curve is downsloping, causing the marginal-revenue curve to lie below the demand curve. Like the competitive seller, the pure monopolist will maximize profit by equating marginal revenue and marginal cost. Barriers to entry may permit a monopolist to acquire economic profit even in the long run.
Which statements is true about profits in a monopolistically competitive market?
many firms will earn profits in the short term, but they must constantly innovate and compete to earn profits in the long term
When a second firm enters a monopolist's market what will the initial demand curve facing the monopolist do?
shift to the left.
What is one market trend that results when a monopolistically competitive firm starts earning profits well above its costs?
Fierce competition would encourage rivals to create new ways to differentiate their products and lure customers to them.
Why is the demand curve facing a monopolist less elastic than one facing a firm that operates in a monopolistically competitive market?
In a monopoly, the monopolist company is the only product in the market place. However, a company competing in a monopolistically competitive market has multiple "similar" competitors that all try and differentiate themselves with specialized or additional services; i.e. the Italian restaurant serving food only from northern Italy. These companies may be a monopoly in the sense that their niche product is one-of-a-kind, but there are substitute products that can replace them if their price becomes too high to the consumer. As a result, the firm in a monopolistically competitive has a more elastic demand than a true monopolist.
Explain why a monopolist must lower its quantity relative to a competitive market to maximize its profits?
A monopolist must lower its quantity relative to a competitive market to maximize its profits because the monopolist already controls and owns the largest share of the market.
Why a monopolist must lower its quantity relative to a competitive market to maximize its profits?
A monopolist has to lower its quantity relative to the competitive market to maximize profits because the monopolist is already in control of the biggest part of the market. This means that because they're already in control, to keep the market competitive they need to release the same amount of product as their competition.
The demand curve for a monopolist differs from the demand curve faced by a competitive firm?
The pure monopolist's market situation differs from that of a competitive firm in that the monopolist's demand curve is downsloping, causing the marginal-revenue curve to lie below the demand curve. Like the competitive seller, the pure monopolist will maximize profit by equating marginal revenue and marginal cost. Barriers to entry may permit a monopolist to acquire economic profit even in the long run.
Which statements is true about profits in a monopolistically competitive market?
many firms will earn profits in the short term, but they must constantly innovate and compete to earn profits in the long term
When a second firm enters a monopolist's market what will the initial demand curve facing the monopolist do?
shift to the left.
What is one market trend that results when a monopolistically competitive firm starts earning profits well above its costs?
Fierce competition would encourage rivals to create new ways to differentiate their products and lure customers to them.
How much control does monopolist have over pricing?
Total control, as there is no competition the monopoly vendor can ask any price they wish. That is why monopolies are bad for society and Governments have to intervene in the capitalistic market.
What is meant by the term a competitive market?
there are many producers selling the same products at similar prices.
How is a monopoly and a perfectly competitive firm similar?
A perfect competitive market and pure monopoly market both have to follow the "law of demand".
Does the eventual ending of that monopoly cause the monopolist to lose all of its market power?
this is not perfect answer
What is competitive frame of reference in marketing?
Competitive frame of reference in marketing refers to comparing the brand to other similar brands on the market showing the advantages and strengths weakening the competition.
