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Lecture Economics - Chapter 10: Monopolistic competition and oligopoly
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Lecture Economics - Chapter 10: Monopolistic competition and oligopoly
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In this chapter, you will learn to solve these economic puzzles: How does the NCAA Final Four basketball tournament use imperfect competition? Are Cheerios, Rice Krispies, and other brands sold by firms in the breakfast cereal industry produced under monopolistic competition or oligopoly? Why will Ivan’s Oyster Bar make zero economic profit in the long-run? Why do OPEC and other cartels tend to break down? | Chapter 10 Monopolistic Competition and Oligopoly ©2000 South-Western College Publishing Key Concepts Summary Practice Quiz Internet Exercises * In this chapter, you will learn to solve these economic puzzles: How does the NCAA Final Four basketball tournament use imperfect competition Why do OPEC and other cartels tend to break down? Why will Ivan’s Oyster Bar make zero economic profit in the long-run? Are Cheerios, Rice Krispies, and other brands sold by firms in the breakfast cereal industry produced under monopolistic competition or oligopoly? * What is Imperfect Competition? A market structure between the extremes of perfect competition and monopoly * What is Monopolistic Competition? many small sellers differentiated product easy entry and exit * What is Product Differentiation? The process of creating real or apparent differences between goods and services * What does Many Small Sellers mean? Each firm is so small relative to the total market that each firm’s pricing decisions have a negligible effect on the market price * What is Nonprice Competition? A firm competes using advertising, packaging, product development, better service, rather than lower prices * How easy is entry and exit in Monopolistic Competition? Not as easy as in Perfect Competition because of product differentiation * Why is a Monopolistic Competitive firm a price maker? Product differentiation gives the firm some control over its price * What does the demand curve for Monopolistic Competition look like? It is less elastic (steeper) than for a perfectly competitive firm and more elastic (flatter) than for a monopolist * What are examples of Monopolistic Competition? grocery stores hair salons gas stations video rental stores restaurants * How effective is Advertising? Somewhat effective in the short-run but less effective in the long-run * What effect does Advertising have on Average Costs? It raises the long-run average cost curve * . | Chapter 10 Monopolistic Competition and Oligopoly ©2000 South-Western College Publishing Key Concepts Summary Practice Quiz Internet Exercises * In this chapter, you will learn to solve these economic puzzles: How does the NCAA Final Four basketball tournament use imperfect competition Why do OPEC and other cartels tend to break down? Why will Ivan’s Oyster Bar make zero economic profit in the long-run? Are Cheerios, Rice Krispies, and other brands sold by firms in the breakfast cereal industry produced under monopolistic competition or oligopoly? * What is Imperfect Competition? A market structure between the extremes of perfect competition and monopoly * What is Monopolistic Competition? many small sellers differentiated product easy entry and exit * What is Product Differentiation? The process of creating real or apparent differences between goods and services * What does Many Small Sellers mean? Each firm is so small relative to the total market that each .
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