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