One mesoeconomic concept that was presented in the book was monopolistic competition. I chose this concept because it explains how businesses attempt to form possible monopolies and the potential influence it can have on the economy. "In September 1996, Office Depot and Staples, the two largest office superstores in the United States, announced an agreement to merge. Seven months after the merger was proposed, the FTC voted to oppose the merger onthe grounds that it would harm competition and lead to higher prices in the office superstore market. The FTC argued that the relevant market was the market for office supplies. The FTC made this distinction because the superstores carry a broad range of office supplies and maintain a huge inventory that let's consumers do one-stop shopping at these stores." (Farnham, 211) Simply put the Federal Trade Commission disapproved of this because they felt it would destroy small businesses (many that were already exterminated thanks to Home & Office Depot), and make Office Max, the only real competitor left obsolete. The rationale of the FTC was that both companies were inherently competitors and that a merger between the two would only lead to higher prices seeing how there would be no company to contest the proposed merger. The next concept is that of First-Degree Price Discrimination and consumer surplus. Consumers surplus is the concept that consumers typically do not have to spend the maximum amount they are willing to pay for a…
Kudler Foods uses a monopolistic competition market structure to compete with their competition. There are few other businesses offering similar products in the area. The biggest competition to Kudler Foods is Cardiff Seaside Market. There are few entry barriers to opening a new business in the area, good long term run potential, and the firms already established are big enough to influence the supply of customers. Food stores in the area have multiple forms of competition with food distributors…
Economists have identified four types of competition—perfect competition, monopolistic competition, oligopoly, and monopoly. Perfect competition was discussed in the last section; we’ll cover the remaining three types of competition here.
In monopolistic competition, we still have many sellers (as we had under perfect competition). Now, however, they don’t sell identical products. Instead, they sell differentiated products—products that differ somewhat, or are perceived…
Monopolistic competition vs. Perfect competition
Bernadette Giene Cain
BUS650: Managerial Finance
Dr. Stanley Atkinson
April 20, 2015
Perfect competition has a large number of buyers and sellers that buy and sell identical products, and they are identical in all their features, and the prices charged are a uniform price. The players in the market are not large enough alone to be a market leader or set prices since the products are sold and priced identically, with no barriers of entry…
SUMMARY OF MONOPOLISTIC COMPETITION
This note offers a summary of monopolistic competition; it introduces the theory of monopolistic competition to readers, including character of this term, definition of production discrimination and production group, the hypothesis of model of monopolistic competition, the demand curve that manufacturers affront and the decision of equilibrium price and output in the presence of monopolistic competition. Moreover, it presents briefly the development…
al., 2006 p. 10)”A ‘pure’ free market economy there would be no government intervention and decision as to the allocation of resources would be taken by individual producers and consumer through a system known as the price mechanism”.
The market economy is a dynamic environment, where the consumers’ choices can influence the producers’ decisions. The producers are motivated by financial results, and tend to follow the consumers’ trends. The market economy has the advantage to rapidly allocate…
LO 11.1, 11.2, 11.3, 11.4, 11.5, 11.6, 11.7
11.1 Identify and explain the characteristics of monopolistic competition.
Relatively large numbers
Easy entry conditions
11.2 Using revenue and cost information, determine the price, output, and profit for a firm in monopolistic competition in the short run.
? Describe the demand curve for monopolistic competitor.
? Calculate profit maximization in the monopolistically competitive market.
and features of each. I will begin with the four types of market structures which are as follows: perfect competition, monopolistic competition, oligopoly and monopoly.
Perfect Competition is the market structure in which there are many sellers and buyers, firms produce a homogeneous products and there is free entry into and exit out of the industry(Amacher & Pate, 2013) perfect competition is a theoretical model and there is asking no real data on this model because in reality it does not exist…
between Monopolistic Competition and Monopoly market structures? To what extent do you agree with the view that Monopolies are ‘bad’ for the consumers?
Tutor Name : RecepYucedogru
Student ID : 133214
Date of Submission : 21/03/2012
Word Count : 1,000
- Definition of both monopolistic competition and monopoly.
- Examples for both definitions.
2. The main differences
- The main differences between monopolistic competition and
easy to cook meal. There are several choices of low calorie frozen, microwaveable food products available in the market nowadays (Creasy, 2015). This implies that the market structure is somewhere between a monopolistic and oligopolistic competition, leaning more towards monopolistic competition (Economicsonline.co.uk, 2015). The low-calorie frozen food products available in the market are relatively similar with slight differentiation amongst them.
The lifestyle of people has…
This essay will look at efficiency between both a monopoly and a perfect competition, and whether a monopoly is necessarily less efficient than perfect competition. Using diagrams and equations reflecting the optimal choice of output, marginal revenue and marginal cost for monopolies, I will explain how efficiency is affected by low levels of production. At the same time monopolies can increase efficiency due to their ability in price discrimination, they price people differently and therefore…