Question and answer
what role does monopolistic competition play in the economy
Monopolistic competition is a type of imperfect competition such that one or two producers sell products that are differentiated from one another as goods but not perfect substitutes (such as from branding, quality, or location). [ In monopolistic competition, a firm takes the prices charged by its rivals as given and ignores the impact of its own prices on the prices of other firms.[1] In a
monopolistically competitive market, firms can behave like monopolies in the short run, including by using market power to generate profit. In the long run, however, other firms enter the market and the benefits of differentiation decrease with competition; the market becomes more like a perfectly competitive one where firms cannot gain economic profit. In practice, however, if consumer rationality/innovativeness is low and heuristics are preferred, monopolistic competition can fall into natural monopoly, even in the complete absence of government intervention.[2] In the presence of coercive government, monopolistic competition will fall into government-granted monopoly. Unlike perfect competition, the firm maintains spare capacity. Models of monopolistic competition are often used to model industries. Textbook examples of industries with market structures similar to monopolistic competition include restaurants, cereal, clothing, shoes, and service industries in large cities. The "founding father" of the theory of monopolistic competition is Edward Hastings Chamberlin, who wrote a pioneering book on the subject, Theory of Monopolistic Competition (1933).[3] Joan Robinson published a book The Economics of imperfect competition' with a comparable theme of distinguishing perfect from imperfect competition. Monopolistically competitive markets have the following characteristics: There are many producers and many consumers in the market, and no business has total control over the market price. Consumers perceive that there are non-price differences among the competitors' products. There are few barriers to entry and exit.[4] Producers have a degree of control over price. The long-run characteristics of a monopolistically competitive market are almost the same as a perfectly competitive market. ]
Expert answered|sweetypie1431|Points 126|
Question
Asked 8/19/2012 6:58:28 PM
0 Answers/Comments
Get an answer
New answers
Rating

There are no new answers.

Comments

There are no comments.

Add an answer or comment
Log in or sign up first.
Questions asked by the same visitor
what role does a monopoly plays in the economy'
Weegy: A monopoly occurs when only one company sells a particular product on the market. [ [ A 'natural monopoly' A natural monopoly occurs when the type of industry makes it financially impractical, if not impossible, for multiple companies to engage in the business. 'Geographic monopolies' occur when there is only one company that offers a particular good or service in an area. 'Technological monopolies' occur when the good or service the company provides is has legal protection in the form of a patent or copyright. Finally, a 'government monopoly' exists when a a government passes laws reserving a specific trade, product or service for government agencies. ] ] (More)
Question
Expert Answered
Asked 8/18/2012 5:10:35 PM
0 Answers/Comments
18,406,692 questions answered
Popular Conversations
3x + 1 User: Factor 25x 2 + 10x + 1.
Weegy: the answer is (1+5 x)^2 User: The length of a rectangle is 3 more than twice the width. The area of the ...
11/21/2014 9:59:24 AM| 4 Answers
Multiply 3X 1 1/4 User: subtract the fractions and simplify the ...
Weegy: 13/15 - 1/5 = 13/15 - 3/15 = 10/15 = 2/3 User: Divide the fractions and simplify the answer 60 divide by 2 2/3 ...
11/21/2014 8:14:33 PM| 3 Answers
Class C helmets are made of aluminum and do not provide protection ...
Weegy: Class C helmets are made of aluminum and do not provide protection from: Electrical hazards. (Class C ...
11/21/2014 1:44:29 AM| 2 Answers
Which pronoun agrees with the antecedent? Both carrots and sweet ...
Weegy: Both carrots and sweet potatoes get ITS color from beta-carotene.
11/21/2014 6:49:00 AM| 2 Answers
One weakness of the British army was fighting on foreign soil.
Weegy: One weakness of the British army was fighting on foreign soil. TRUE.
11/21/2014 7:22:57 AM| 2 Answers
What is translation?
11/21/2014 7:50:29 AM| 2 Answers
Which base is in RNA, but not in ...
11/21/2014 7:46:32 AM| 2 Answers
Identify the solution(s) of the system of equations, if any. -4x - 2y ...
Weegy: -4X-2y=12 -12X-6Y=36 X=(12+2Y)/-4 substitute x to second equation -12[(12+2Y)/-4]-6Y=36 36+6Y-6Y=36 0=0 ...
11/21/2014 9:54:31 AM| 2 Answers
What is the equation of the line that passes through (0, -2) and ...
Weegy: The equation of the line that passes through (0, -2) and has a slope of 0 is y = -2. User: Find two ...
11/21/2014 10:04:27 AM| 2 Answers
The principle of dominance states that a. all alleles are ...
Weegy: Every allele is a _ d. dominant or recessive _ allele. User: In pea plants, yellow peas are dominant over ...
11/21/2014 10:23:12 AM| 2 Answers
Weegy Stuff
S
L
1
L
P
C
1
P
C
1
L
P
C
1
Points 2276 [Total 13987]| Ratings 10| Comments 2176| Invitations 0|Online
S
L
Points 1255 [Total 3541]| Ratings 0| Comments 1255| Invitations 0|Offline
S
L
Points 686 [Total 1207]| Ratings 6| Comments 626| Invitations 0|Offline
S
1
L
1
L
P
P
L
P
Points 681 [Total 14055]| Ratings 0| Comments 681| Invitations 0|Offline
S
Points 421 [Total 453]| Ratings 1| Comments 411| Invitations 0|Offline
S
1
L
L
Points 211 [Total 6605]| Ratings 0| Comments 211| Invitations 0|Offline
S
L
Points 148 [Total 1444]| Ratings 3| Comments 118| Invitations 0|Online
S
Points 50 [Total 50]| Ratings 0| Comments 0| Invitations 5|Offline
S
Points 46 [Total 46]| Ratings 3| Comments 6| Invitations 1|Offline
S
Points 40 [Total 40]| Ratings 4| Comments 0| Invitations 0|Offline
Home | Contact | Blog | About | Terms | Privacy | Social | ©2014 Purple Inc.