3. Monopolistic Competition

b. explain relationships between price, marginal revenue, marginal cost, economic profit, and the elasticity of demand under each market structure;

## c. describe a firm’s supply function under each market structure; ## d. describe and determine the optimal price and output for firms under each market structure; ## e. explain factors affecting long-run equilibrium under each market structure;

What is the difference between monopolistic competition and a monopoly? Monopolistic competition has a large number of firms in the market that produce differentiated products. A Monopoly is a single seller in a market with no good substitutes.

What is another term often used for monopolistic market? Competitive price searcher market

What are the four characteristics of a monopolistic market? 1. Large number of firms 2. Firms produce differentiated products 3. Low barriers to entry 4. Competition is on quality, price, marketing