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Oligopoly is distinguished from monopolistic competition by being composed of few firms (not many); by being mutually interdependent with regard to price (instead of control within narrow limits); by having differentiated or homogeneous products (not all differentiated); and by having significant obstacles to entry (not easy entry). Both engage in much nonprice competition.
physical characteristics
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-problem of fairness -high administrative cost -diminishing incentive
nonprice compition
Oligopoly is distinguished from monopolistic competition by being composed of few firms (not many); by being mutually interdependent with regard to price (instead of control within narrow limits); by having differentiated or homogeneous products (not all differentiated); and by having significant obstacles to entry (not easy entry). Both engage in much nonprice competition.
pure competiton.price competition.nonprice competition.ineffective competition.Answer is: Nonprice competition
It includes many sellers, differentiated products, easy entry and exit, and nonprice competition.
physical characteristics
Bridges information gap.Helps in environmental scanning.Developing, implementing and controlling marketing plans and programs.Meeting nonprice competition.
The answers to the captivity exercise will not be found online. Students will have to visit their instructor for help with the answers.
Non-price competition refers to competition among firms that choose to distinguish their product via non-price means. EX: style, delivery, location, atmosphere, promotions, etc. Non-price competition is often used by firms that wish to differentiate between virtually identical products (dry-cleaners, food products, cigarettes, etc). Although any firm can use non-price competition, it is most common among monopolistically competitive firms. The reason for this is that firms which operate in the monopolistically competitive market are price takers, that is, they simply do not have enough market power to influence or change the price of their good. Consequently, in order to distinguish themselves, they must use non-price means.
-problem of fairness -high administrative cost -diminishing incentive
nonprice compition
nonprice compition
Pure Competition:Involves very large numbers of firms producing identical products.Standardized product (a product identical to that of other producers--ex. corn or cucumbers).no attempt to advertise or differentiateFree Entry and Exit: no significant legal, technological, financial, or other obstacles prohibiting new firms from selling their output in any competitive marketNo control over the price: "Price Takers"(i.e. the firms have no market power) . The individual firm has very little to no impact on the market.Demand is perfectly elastic.Maximizes productive and allocative efficiency.ex. Agriculturepure competition markets do not actually exist.Note: Pure competition does not actually exist in our society, and the agriculture industry is the closest industry to being purely competitive. The pure competition model is used as a standard to evaluate the efficiency of our economy (something to compare to and help our understanding of economy.)Monopolistic Competition:Involves large number of firms, but not as many as in pure competition.Produces differentiated products (ie. clothing, furniture, books) Nonprice competition - a selling strategy in which firms try to distinguish their product or service on the basis of attributes such as design and workmanship (product differentiation)Focuses mostly on advertising, brand names, and trademarksFirms can easily enter or leave this market, although not as easily as firms in a purely competitive market.Imperfect Competition.Limited control over pricesex. retail trade, dresses, shoesOligopoly:Involves a few firms that exert considerable influence over the industryProduces either standardized or differentiated products.NONPRICE COMPETITION: emphasis on product differentiationExisting firms are strong rivals and affects each other's price and output.Control over price limited by mutual interdependence; considerable with collusion (the decision of rivals).Harder for a firm to enter or exit.Imperfect competition.A great deal of nonprice competition, especially with differentiated products ex. steel, automobiles, household appliancesPure Monopoly:Only one firm is involved.Products are unique with no substitutes.NONPRICE COMPETITION: mostly public relationsEntry of additional firms is not possible--one firm constitutes the entire industry.Entry to the industry is often blocked by government. It requires patent or licenses.Since the monopolist produces a unique product, it makes no effort to differentiate its product.Imperfect Competition.There is total control over price "Price Makers"ex. local electric utilityOil, John D. Rockefellerdiamondssource:
Number of sellers, technology, resource prices, taxes/subsidies, expectations of producers, and the prices of other goods the firm could produce