Micro 5.4 0.0 / 5 ? EconomicsMonopolistic CompetitionA2/A-levelAQA Created by: neve.whinnCreated on: 15-03-20 14:46 What is monopolistic competition? A form of imperfect competition with a large number of firms producing slightly differentiated products. 1 of 8 What are 3 characteristics of monopolistic competition? Large number of producers, similar products with differentiation, low barriers to entry and exit. 2 of 8 Where does the monopolistically competitive firm maximise profit? Where MC = MR. 3 of 8 What is the monopolistically competitive firm able to make in the short run? Supernormal profits. 4 of 8 What is the monopolistically competitive firm able to make in the long run? Normal profits. 5 of 8 What do low barriers to entry mean? New firms can enter the industry relatively easily, attracted by the supernormal profits made by some firms. 6 of 8 What is the effect of new entrants into a market? Reduce demand for individual firms as new entrants take market share. 7 of 8 Where is normal profit made? At the profit maximising output. 8 of 8
Negative externalities and market failure, problems of estimating the value of externalities 2.0 / 5 based on 1 rating
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