monopolistic competition

  • Created by: meloakes
  • Created on: 29-03-15 11:47
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  • Monopolistic competition
    • Many firms producing a differentiated product and few barriers to entry and exit
    • Due to differentiation they face downwards sloping D curve
    • Non price competition, but they are price makers
    • Low barriers to entry. Supernormal profit is competed away
    • Profit is normal due to tangible AR and AC
    • Not allocative efficient due to P being higher than MC.
    • Not productive efficient due to operating above minimum AC.


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