Th3.4: Monopolistic Competition Flashcards
1
Q
What is monopolistic competition?
A
a form of imperfect competition with a downward sloping demand curve
2
Q
What does monopolistic competition lie between?
A
the two extremes of perfect competition and monopoly, both of which rarely exist in a pure form in real life
3
Q
What are some examples of firms in monopolistic competition?
A
hairdressers, estate agents and restaurants
4
Q
What are the three characteristics of monopolistic competition?
A
large number of buyers and sellers
no barriers to entry or exit
differentiated, non-homogenous goods
