monopolistic competition Flashcards
1
Q
what is monopolistic competition
A
there are many producers but each one produces a different product and there is free entry and exit
2
Q
what are the three different forms of differentiation
A
style or type, location, and quality
3
Q
how do these firms max their profits
A
like every other firm when MR=MC
4
Q
is monopolistic competition inefficient
A
no because it provides value to consumers with a wide variety of goods to choose from
5
Q
what are the two roles of advertising
A
to inform the consumer about the product or to persuade the consumer to buy the product
6
Q
what is tacit collusion
A
its collusion between competitors and this is not a part of a monopolistically competitive market. this agreement is unspoken
