imperfect competition

Question 1

many industries fail somewhere between polar cases of …

economists call this situation _________

Answer 1

perfect competition and monopoly

Imperfect competition

Question 2

define imperfect competition

Answer 2

refers to economic market conditions that do not meet the assumptions of perfect competition.

ex: monopolies, oligopolies

Question 3

define monopolistic competition

Answer 3

a market structure in which many firms sell products that are similar but not identical

Question 4

monopolistic competition 3 characteristics

Answer 4

many sellers
product differentiation
free entry & exit

Question 5

many sellers

Answer 5

numerous firms are competing for the same group of customers

Question 6

product differentiation

Answer 6

each firm offers a product that is at least slightly different from those of other firms.

Question 7

free entry and exit

Answer 7

firms can enter or exit the market without restrictions

the number of firms in the market adjust until economic profits are driven to 0.

Question 8

monopolistic competition is a market structure that lies between..

Answer 8

the extreme cases of perfect competition (M led) and monopoly (M power)