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Question 1

Characteristics of Perfect Competition

Answer 1

Standard or homogenous products, low barriers to entry, many sellers, no pricing power, no non-price competition.

Question 2

Characteristics of Monopolistic Competition

Answer 2

Differentiated products, low barriers to entry, some pricing power, some non-price competition as advertising differentiation.

Monopolistic competition is another name for competitive price-searcher markets. There are a large number of independent sellers, each produces a differentiated product, each market has a low barrier to entry, and each producer faces a downward sloping demand curve.

Question 3

Characteristics of Oligopoly

Answer 3

homogenous or standardized product, barriers to entry are high, few sellers, some or considerable pricing power, non-price competition as advertising and product differentiation

Question 4

Characteristics of Pure Monopoly

Answer 4

Unique Product, 1 seller, very high barriers to entry, considerable pricing power, non-price competition in advertising