Micro A2 - Monopolistic Competiton Flashcards
1
Q
Characteristics of monopolistically competitive markets
A
- Lower barriers to entry and exit
- differentiated products (may create barriers in short run)
- price setters
- low market share
- many buyers and sellers
- e.g. coffee chop, hairdressers, car washing
- usually commodities
2
Q
Short run profit maximisation
A
3
Q
Long run profit maximisation
A
4
Q
How to do diagrammatical analysis of profit maximisation
A
