Monopolistic competition

Question 1

What are the characteristics of monopolistic competition?

Answer 1

Many buyers and sellers
Perfect information
Slightly differentiated products
Very low barriers to entry and exit

Question 2

How is profit maximised in monopolistic competition?

Answer 2

Supernormal profits are made in the short run which would attract new supplier who offer new products and sp normal profit can only be made in the long run.

Question 3

What are some non-price competition methods?

Answer 3

Efficiency and use of online ordering
Making clothing available in a bigger range of sizes
Customisation of products
Return policies
Outlet shops
Effective use of social media
Taking steps to address corporate social responsibility