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How a firm in monopolistic competition makes decision on price and quantity?
Wiki User
∙ 13y ago
In a monopolistic competition, the prices are determined by the demand and supply for that good. However, since each good is branded and distinguishable from each other, each firm can take non-price measures (marketing) to attract more customers.
Hence, price is determined by the market while the quantity, although determined by market to some extent, still relies on the marketing measures of each individual firms.
Wiki User
∙ 13y ago
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What is a market structure with a large number of sellers who makes differentiated products is called?
Monopolistic competition
Why firms choose non-price competition over price competition?
Imperfectly competitive firms engage in none-price competition (like advertisement). For example, in monopolistic competition, each firm has their own customers(by establishing some consumer loyalty), modest change in the output price of any single firm has no perceptible influence on the sales of any other firm, i.e one firm can raise price without losing all customers. Therefore, price competition makes no sense.
Why do monopolistic competitor operate at excess capacity?
Monopolistic competitors operate at excess capacity to discourage new firms from going into the industry, i.e, to deter entry. Operating at excess capacity means a firm produces large quantities of goods and at lower prices. This makes it difficult for newly established firms to compete, thus ensuring that the incumbent firm maintains its monopolistic position in the market.
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What is a market structure with a large number of sellers who makes differentiated products is called?
Monopolistic competition
Why firms choose non-price competition over price competition?
Imperfectly competitive firms engage in none-price competition (like advertisement). For example, in monopolistic competition, each firm has their own customers(by establishing some consumer loyalty), modest change in the output price of any single firm has no perceptible influence on the sales of any other firm, i.e one firm can raise price without losing all customers. Therefore, price competition makes no sense.
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Dishonesty and the fraudulent means is what makes the competition unfair.
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Why do monopolistic competitor operate at excess capacity?
Monopolistic competitors operate at excess capacity to discourage new firms from going into the industry, i.e, to deter entry. Operating at excess capacity means a firm produces large quantities of goods and at lower prices. This makes it difficult for newly established firms to compete, thus ensuring that the incumbent firm maintains its monopolistic position in the market.
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Fraudulent means and dishonesty over rivals is what makes a competition unfair.
What are the release dates for A Citizen Makes a Decision - 1954?
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