Chapter 12: Monopolistic Competition and Advertising Flashcards
1
Q
type of market structure characterized by free entry, many different firms, and product differentiation
A
monopolistic competition
2
Q
the process that firms use to make a product more attractive to potential customers
A
product differentiation
3
Q
the difference between the price the firm charges and the marginal cost of production
A
markup
4
Q
occurs when a firm produces at an output level that is smaller than the output level needed to minimize average total costs
A
excess capacity
