Monopolistic Competition
It is a market situation in which there are large number of buyers and seller which buy and sell different goods and services.
Features of Monopolistic Competition
1) Large number of buyers
and no individual buyer can influence market demand.
2) Large number of sellers
and no individual seller can influence market supply.
3) Differentiated goods
are those goods which differ in term of quality for example Soaps.it also called product differentiation.
4) Imperfect knowledge:
Due to the differentiated goods, the price of goods may not be known to the consumers.
5) Selling cost:
It includes all the expenses made to increase the sale of a product for example advertisement etc.
6) Few restrictions:
Copyright, Patent right
7) Demand Curve:
More elastics mean there will be more change in demand with the change in price. It is due to substitutes, more substitutes more elasticity.
8) Revenue curve under monopolistic competition
A downward sloping demand curve leads to a marginal revenue that is always less than the price of goods, when price decrease, it reduces the revenue per unit, but output increases total units sold.
9) Producer's equilibrium
Comments
Post a Comment