monopolistic competition
DESCRIPTION
eco 1TRANSCRIPT
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MEANING
In monopolistic competition many sellers selling differentiated product as well as they have some control over the price.
DEFINITION
Monopolistic competition is a competitive market in which many sellers, selling heterogeneous goods
DESCRIPTION: Imperfect competition is the real world
competition. In this market sellers can influence the
price in order to earn more profits.
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FOUR TYPES OF IMPERFECT MARKETS:
Monopoly ----- one seller Oligopoly -------few sellers Monopolistic competition ---many sellers
with highly differentiated product Monopsony ------- one buyer
CHARACTERISTICS OF MONOPOLISTIC COMPETITION
Product differentiation Many firms No entry and exit cost in the long run Independent decision making Some degree of market power Imperfect Information Price setter
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PRODUCTS ARE DIFFERENTIATED& MANUFACTURES HAVE SOME CONTROL OVER THE PRICE &WASTAGE BY ADVERTISEMENT
DIAGRAM
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EXAMPLES
Trucks,Cars,Motor cycles manufactures. In these market products are
differentiated as well as they have some control over the price.
PROBLEMS OF MONOPOLISTIC COMPETITION
Inefficient in allocation Wastage Excess capacity Advertisement cost
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