Overview
Monopolistic competition is a significant market structure characterized by many firms selling similar but differentiated products. This differentiation allows firms to have some control over their pricing, leading to a downward-sloping demand curve. In the long run, the entry of new firms into the ...
Key Terms
Example: The restaurant industry is a classic example of monopolistic competition.
Example: Different flavors of ice cream offered by various brands.
Example: A popular brand can charge more due to its reputation.
Example: The demand curve for a unique coffee shop's specialty drinks.
Example: The cost of making one more pizza at a pizzeria.
Example: The extra income from selling one more burger.
Related Topics
Oligopoly
A market structure with a few firms dominating the market, often leading to collusion.
advancedPerfect Competition
A market structure where many firms sell identical products, leading to no market power.
intermediateGame Theory
The study of strategic interactions among firms, particularly in oligopolistic markets.
advancedKey Concepts
Product DifferentiationMarket PowerPrice ElasticityLong-Run Equilibrium