Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

Chapter 16 - Part V - Monopolistic Competition - Questions for Review - Page 345: 1

Answer

1. There are numerous sellers 2. Each seller has a product that is slightly different than that offered by the competition 3. Low barriers of entry to the market Characteristics 1 and 3 are similar to the perfect competition. In addition, perfectly competitively firms and monopolistically competitive firms both make 0 profit in the long run. Characteristic 2 is similar to monopolies in that a monopoly has no competition that sells the same product. This is why both monopolies and monopolistically competitive firms have downward sloping demand curves.

Work Step by Step

N/A
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.