chp 16 Flashcards
1
Q
a monopolistic competitive market has 3 characterizations:
A
many firms, differentiated products, and free entry
2
Q
the equilibrium in a monopolistically competitive market differs from a perfectly competitive market in 2 ways
A
1) each firm in a monopolistic competitive market has excess capacity
2) each firm charges a price above marginal cost
3
Q
Oligopoly
A
only a few sellers offer similar or identical products
4
Q
monopolistic competition
A
many firms sell similar but not identical products
5
Q
policy makers are _____ to correct inefficiencies of monopolistic competition
A
limitied
