Comment Re:Managing the Market (Score 1) 274
You should actually read your links:
Monopolistically competitive markets have the following characteristics:
* There are many producers and many consumers in a given market.
* Consumers have clearly defined preferences and sellers attempt to differentiate their products from those of their competitors; the goods and services are heterogeneous.
* There are no barriers to entry and exit[1].
The characteristics of a monopolistically competitive market are almost exactly the same as in perfect competition, with the exception of heterogeneous products, and that monopolistic competition involves a great deal of non-price competition (based on subtle product differentiation). This gives the company a certain amount of influence over the market; it can raise its prices without losing all the customers, owing to brand loyalty. This means that an individual firm's demand curve is downward sloping, in contrast to perfect competition, which has a perfectly elastic demand schedule.
Monopolistically competitive markets have the following characteristics:
* There are many producers and many consumers in a given market.
* Consumers have clearly defined preferences and sellers attempt to differentiate their products from those of their competitors; the goods and services are heterogeneous.
* There are no barriers to entry and exit[1].
The characteristics of a monopolistically competitive market are almost exactly the same as in perfect competition, with the exception of heterogeneous products, and that monopolistic competition involves a great deal of non-price competition (based on subtle product differentiation). This gives the company a certain amount of influence over the market; it can raise its prices without losing all the customers, owing to brand loyalty. This means that an individual firm's demand curve is downward sloping, in contrast to perfect competition, which has a perfectly elastic demand schedule.
