Conditions for monopolistic competition Consider the monopolistically competitiv

Question

Conditions for monopolistic competition

Consider the monopolistically competitive market structure, which has some features of a competitive market and some features of a monopoly.

Complete the following table by indicating whether each attribute characterizes a competitive market, a monopolistically competitive market, both, or neither. Check all that apply.

Attributes

Competitive Market

Monopolistically Competitive Market

Attributes

Competitive Market

Monopolistically Competitive Market

Price equals average total cost in the long run Identical products Product differentiation Many sellers

Explanation / Answer

Attributes

Competitive Market   

Monopolistically Competitive Market

Product differentiation

Many sellers

False

True but more than that in Monopolistic Competition

True

Sellers are many but less than that in perfect competition

Attributes

Competitive Market   

Monopolistically Competitive Market

Price equals average total cost in the long run True True Identical products True False ( Differentiated prodcuts with close substitutes)

Product differentiation

Many sellers

False

True but more than that in Monopolistic Competition

True

Sellers are many but less than that in perfect competition

  

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