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When there is no competition, the amount you can produce is dictated by the demand, while when there is competition, part of the demand is met by the competition and you can only sell enough to meet the remaining demand, thus without competition a firm looks like making more, but in reality does not.
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Dominos fast food firm is a monopolistic firm or not?
it is not a monopoly firm
Is it true the demand curve of a monopolistic competitive firm is more elastic than that of a pure monopolist?
YES
How are a monopolistic firm and a competitive firm similar?
Monopoly means that there are no competitor for your product or servises
What is the Price output determination under monopolistic competition?
Define monopolistic competition. How price & output is determined under monopolistic competition.Answer: - monopolistic competition: - in 1933, a Harvard university professor, Edward chamberlain" published his book, "the theory of monopolistic competition" in which he defined monopolistic competition as:Definition: - "a market model with freedom of entry and large number of firms that produce similar by slightly differentiated products, advertisement being the principal tool for differentiating the products".Define monopolistic competitionThere are various goods like soap, cloth, & tooth paste, which are produced under monopolistic competition.CONDITIONS OF MONOPOLISTIC COMPETITION: - following are the important conditions of monopolistic competitionSellers and buyers: - there is a large number of buyers and sellers in the monopolistic market. Generally, the number of firms is within 25-30.Small share of supply: - each firm acts independently and produce a small share of the total output.Differentiated products: - the product of each firm can be differentiated by trade mark or packing.Entry of new firms: - in a monopolistic competition, new firms can easily enter into the market.Inefficient firms in the market: - inefficient firms also live in the market side by side & sell the defective products.Control over price: - a firm has only limited control cover the price of the product according to its supply.Elastic demand curve: - the demand curve of the firm is negatively sloped, and because there are many firms in the market which are producing a similar commodity. Therefore, the demand for the products of each firm is elastic.Advertising: - In a monopolistic competition, firms spends a lot of money on advertisement, to attract the consumers.Stiff competition: - there is a stiff competition among the firms for the sale of a particular brand, not only in price but also in the quantity of the product.
Characteristics of a monopolistic competitive market?
one firm which sells a good price set by that firm hard for other firms to enter market
Dominos fast food firm is a monopolistic firm or not?
it is not a monopoly firm
Is it true the demand curve of a monopolistic competitive firm is more elastic than that of a pure monopolist?
YES
How are a monopolistic firm and a competitive firm similar?
Monopoly means that there are no competitor for your product or servises
What is the Price output determination under monopolistic competition?
Define monopolistic competition. How price & output is determined under monopolistic competition.Answer: - monopolistic competition: - in 1933, a Harvard university professor, Edward chamberlain" published his book, "the theory of monopolistic competition" in which he defined monopolistic competition as:Definition: - "a market model with freedom of entry and large number of firms that produce similar by slightly differentiated products, advertisement being the principal tool for differentiating the products".Define monopolistic competitionThere are various goods like soap, cloth, & tooth paste, which are produced under monopolistic competition.CONDITIONS OF MONOPOLISTIC COMPETITION: - following are the important conditions of monopolistic competitionSellers and buyers: - there is a large number of buyers and sellers in the monopolistic market. Generally, the number of firms is within 25-30.Small share of supply: - each firm acts independently and produce a small share of the total output.Differentiated products: - the product of each firm can be differentiated by trade mark or packing.Entry of new firms: - in a monopolistic competition, new firms can easily enter into the market.Inefficient firms in the market: - inefficient firms also live in the market side by side & sell the defective products.Control over price: - a firm has only limited control cover the price of the product according to its supply.Elastic demand curve: - the demand curve of the firm is negatively sloped, and because there are many firms in the market which are producing a similar commodity. Therefore, the demand for the products of each firm is elastic.Advertising: - In a monopolistic competition, firms spends a lot of money on advertisement, to attract the consumers.Stiff competition: - there is a stiff competition among the firms for the sale of a particular brand, not only in price but also in the quantity of the product.
Why is there so much advertising in monopolistic competition?
In monopolistic competition, many different producers are involved in the market selling similar but somewhat different goods. Since the goods are somewhat different, one of the most important ideas which firms in monopolistic competition must understand is brand loyalty. In order to create brand loyalty, advertising is used to attract the attention of consumers. If this advertising is successful, it can lead to a consumer's predetermined assumptions about a firm's products which can enhance the loyalty which the consumer will display to the particular firm. The consumer will be more likely to keep returning to purchase more products from this firm, therefore allowing the firm to practice monopoly in the short run and make more of a profit as a result.
Characteristics of a monopolistic competitive market?
one firm which sells a good price set by that firm hard for other firms to enter market
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.
What does the monopoly surplus graph reveal about the market power and economic efficiency of a monopolistic firm?
The monopoly surplus graph shows that a monopolistic firm has market power, meaning it can set prices higher than in a competitive market. This leads to economic inefficiency because the firm produces less and charges higher prices, resulting in a deadweight loss for society.
Why can a firm in monopolistic competition make an economic profit only in the short run?
A firm in monopolistic competition can make an economic profit only in the short run because in the long run, other firms can enter the market and offer similar products, increasing competition and driving down prices, which reduces the firm's ability to maintain high profits.
What happens to monopolistic competitive firm that begins to charge an excessive price for its product?
Consumers will substitute with a rival's product.
Compare monopoly and monopolistic competition?
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.
Can a monopolistic competitive firm earn long run profit?
In the long run, if a firm is making a profit more firms will enter. This will cause profit to drop. Firms will eventually drop out because of this and economic profit will makes it way to zero(a result of the invisible hand).
