The lack of competition breeds complanency and inefficiency.
There are several potential disadvantages associated with monopolistic competition. They areSome differentiation does not create utility but generates unnecessary waste, such as excess packaging. Advertising may also be considered wasteful, though most is informative rather than persuasive.There is allocative inefficiency in both the long and short run. This is because price is above marginal cost in both cases. In the long run the firm is less allocatively inefficient, but it is still inefficient.
Monopolistic competition is a market situation that is different from both perfect competition (PC) and monopoly. The theory of monopolistic competition was first developed by Chamberlin. In monopolistic competition the firms sell differentiated yet highly substitutable products, whereas in PC, the firms engage in production of homogeneous products. This product differentiation gives the firms a bit of monopoly power in pricing and they face slightly downward sloping demand curve as compared to the horizontal demand curve of PC. However, the free entry and exit of firms ensures that these firms have limited monopoly and no super normal profits arise in the long-run.
In the short run, abnormal profits exist but in the long run, it gets eroded away because new firms enter the industry.
c) no barriers to entry or exit in the long run
A monopoly is a market which has only one firm, the firm has market power, and there are barriers to entry. The long run profits for a monopolist may be greater than zero. Monopolistic competition is more closely related to perfect competition than monopoly. In monopolistic competition, there are many firms in the market. However, each firm has product differentiation. An example of monopolistic competition would be the jeans industry. There are many different types/quality of jeans e.g. True Religion, Levi's and Lee's. Products are somewhat differentiated, but, as in perfect competition, the long run profit = 0. Oligopoly is a market in which there are only a few firms, each firm has market power, and there is much product differentiation between the firms. The long-run profit of oligopoly can be greater than zero, because there are barriers to entry in the market.
There are several potential disadvantages associated with monopolistic competition. They areSome differentiation does not create utility but generates unnecessary waste, such as excess packaging. Advertising may also be considered wasteful, though most is informative rather than persuasive.There is allocative inefficiency in both the long and short run. This is because price is above marginal cost in both cases. In the long run the firm is less allocatively inefficient, but it is still inefficient.
long-term productivity...
Because much like the light bulb and fans, there's always a bi-product during the main process. So long as the heat engine makes a sound, it'll be inefficient.
Capital markets buy and sell long term debt while financial markets trade securities that have lower values. Most capital markets can only be accessed by people in the financial sector.
Business markets are classified under various forms: 1.On the basis of competition: Perfect competition,monopoly,monopolistic,oligopoly,duopoly,moopsony. 2.on the basis of area: local,provincial,national,international market 3.On the basis of time: very short period,short period,long period market 4. On the basis of quantity: wholesale and retail market 5. On the basis of legality: open and black market 6.On the basis of goods: commodity and factor market
Monopolistic competition is a market situation that is different from both perfect competition (PC) and monopoly. The theory of monopolistic competition was first developed by Chamberlin. In monopolistic competition the firms sell differentiated yet highly substitutable products, whereas in PC, the firms engage in production of homogeneous products. This product differentiation gives the firms a bit of monopoly power in pricing and they face slightly downward sloping demand curve as compared to the horizontal demand curve of PC. However, the free entry and exit of firms ensures that these firms have limited monopoly and no super normal profits arise in the long-run.
In the short run, abnormal profits exist but in the long run, it gets eroded away because new firms enter the industry.
c) no barriers to entry or exit in the long run
Central Bank has facilitated the development of these markets by providing a conducive atmosphere for setting up financial institutions which avail long finance on long term basis such as building societies and Mortgauge houses. Longterm finances available in the capital markets are relatively cheaper. There is less misuse of funds from capital markets as they are available in form of fixed assets Easy access as goodwill of the borrower may not be neccessary and securities may not be needed.
because they taste bad.
A monopoly is a market which has only one firm, the firm has market power, and there are barriers to entry. The long run profits for a monopolist may be greater than zero. Monopolistic competition is more closely related to perfect competition than monopoly. In monopolistic competition, there are many firms in the market. However, each firm has product differentiation. An example of monopolistic competition would be the jeans industry. There are many different types/quality of jeans e.g. True Religion, Levi's and Lee's. Products are somewhat differentiated, but, as in perfect competition, the long run profit = 0. Oligopoly is a market in which there are only a few firms, each firm has market power, and there is much product differentiation between the firms. The long-run profit of oligopoly can be greater than zero, because there are barriers to entry in the market.