monopolistic competition Flashcards
What products do firms in monopolistic competition sell?
similar products that are not substitutes
Amount of firms in monopolistic competition
Many firms, free entry and exit
Differentiation of products in a monopolistic competition
Branding, marketing
Elasticity of monopolistic competition?
Inelastic
monopolistic competition - price …
makers
profits of monopolistic competition in long and short run
normal in long term, supernormal in short term
efficiency of monopolistic competition
allocatively and productively inefficient,
produce where P > MC
Oligopoly market share
> 40%
amount of firms in oligopoly
a few, some barriers to entry, possible collusion
cartel
firms acting in unison
nash equilibrium
states that firms take strategic decisions given the ones their competition has taken
laws against collusion?
competition laws, antitrust laws
an oligopoly produces…
more than monopoly, less than competition
mono., oli., comp.
oligopoly prices…
are lower than a monopoly and higher than competition (which equals marginal cost)
resale price maintenance
not allowing businesses requiring retailers to charge a different price
