Chapter 25 Key Concepts Flashcards
Monopolistic Competition (9 cards)
1
Q
Examples of Monopolistic Competition
A
Restaurants, convenience stores
2
Q
Monopolistic Competition Demand Curve
A
More elastic than monopoly but not perfectly elastic like perfect competition
3
Q
Monopolistic Competition Marginal Revenue Graph
A
Downward sloping
4
Q
Monopolistic competition profit
A
P below ATC at Q*
5
Q
Monopolistic competition break-even
A
P equal to ATC at Q*
6
Q
Monopolistic competition loss
A
P less than ATC but above AVC at Q*
7
Q
Monopolistic competition shutdown
A
P less than AVC at Q*
8
Q
Monopolistic competition outcomes
A
Monopolistic competition breaks even in the long run, monopolistic competition produces a lower quantity and charges a higher price than perfect competition, and MC does not operate at lowest ATC
9
Q
Monopolistic Positive results
A
Product variety
