Purchase Solution

Monopolistic competition

Not what you're looking for?

Ask Custom Question

1. "Monopolistic competition is monopolistic up to the point at which consumers become willing to buy close-substitute products and competitive beyond that point." Explain

2. "Competition in quality and service may be just as effective as price competition in giving buyers more for their money." Do you agree? Why? Explain why monopolistically competitive firms frequently prefer non-price competition to price competition.

3. Why might price collusion occur in oligopolistic industries? Assess the economic desirability of collusive pricing. What are the main obstacles to collusion? Speculate as to why price leadership is legal in the United States, whereas price fixing is not.

Purchase this Solution
Solution Summary

Oligopolistic industries are characterized.

Solution Preview

1. Certain products for which there are very few substitutes would give rise to monopolistic competition. This is because there are no other products of the same type available from the few companies that manufacture those, so these companies can behave monopolistically and set the price, supply etc. arbitrarily. For example, HP, Dell, and Compaq produce very high quality laptops that are not available through any other firm. So for these products, these firms can be called monopolistically competitive. On the other hand, for the ...

Purchase this Solution
Free BrainMass Quizzes
Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

View More Free Quizzes
Related BrainMass Solutions

  • Comparing different market structures

    Market entry or exit Monopolistic Competition: Easy Oligopoly: Difficult Monopoly: Very difficult or impossible 4. Non Price Competition Monopolistic Competition: Possible Oligopoly: Possible Monopoly: Not necessary 5.

  • Distinctions between perfect and monopolistic competition

    160152 "In the long run, there is no difference between monopolistic competition and perfect competition." True, false, or ambiguous? "In the long run, there is no difference between monopolistic competition and perfect competition."

  • Monopolistic Competition / Oligopoly

    130699 Monopolistic Competition / Oligopoly Do airlines fit into the concept of monopolistic competition? Why or why not?

  • four market types

    Monopolistic competition is a part of imperfect competition but it lies very close to the perfect competition. Under this market there are many sellers in an industry. The new farm can easily enter into the monopolistic competition.

  • Monopolistic competition

    As they are having some monopoly control Monopolistic competition is briefly compared to perfect completion.

  • Optimal pricing strategy

    A market structure with differentiated products with many competitors is monopolistic competition and not oligopoly. In this context, the monopolistic competition firm is able to collect a price that is based on the average revenue or price.

  • Evolution of Market Structures

    Oligopoly-->Monopolistic Competition-->back to Oligopoly Perfect Competition-->Monopolistic Competition-->Oligopoly-->Monopoly Which path is the most consistent with the traditional Product Life Cycle (introduction, growth, maturity, decline)?

  • Monopolistic Competition and Differentiating Products and Services

    586868 Monopolistic Competition and Differentiating Products and Services Explore how firms in monopolistic competition differentiate their products or services to generate a market niche and gain more control over their pricing.

  • Indicate whether each statement refers to perfect competitio

    MONOPOLY, MONOPOLISTIC COMPETITION, AND OLIGOPOLY Indicate whether each statement refers to perfect competition, monopoly, monopolistic competition, and/or oligopoly.

  • Monopolistic Competition

    175493 What are the monopolistic and the competitive elements of monopolistic competition? What are the monopolistic and the competitive elements of monopolistic competition? Please help. Hello, Please find my response below to your question.

View More Related Solutions