Monopolistic competition
Monopolistic Competition
Market Power
Firms in monopolistic competition or imperfectly competitive markets are more likely to have
limited market power because there are many firms with differentiated products (there are
substitutes) and there is relative ease of entry and exit into the market
Market Power among Sellers
· Monopolistic competition - a market with a large number of sellers and relatively free
entry; each firm "differentiates" its product.
· Oligopoly - a market characterized by significant barriers to entry and "a few "sellers
who recognize their interdependence in the market; products may be homogeneous or
differentiated.
Monopolistic Competition
· Large number of sellers
· relative ease of exit / entry
· products are differentiated
...