Monopolistic Competition
INTRODUCTION
Pure monopoly and perfect competition are two extreme cases of market structure. In reality, there are markets having large number of producers competing with each other in order to sell their product in the market. Thus, there is monopoly on the one hand and perfect competition, on the other hand. Such a mixture of monopoly and perfect competition is called monopolistic competition. It is a case of imperfect competition.
The model of monopolistic competition describes a common market structure in which firms have many competitors, but each one sells a slightly different product. Monopolistic competition as a market structure was first identified in the 1930s by American economist Edward Chamberlin, and English economist Joan Robinson.
Many small businesses operate under conditions of monopolistic competition, including independently owned and operated high-street stores and restaurants. In the case of restaurants, each one offers something different and possesses an element of uniqueness, but all are essentially competing for the same customers.
The aim of the given work is the study of monopolistic competition. The paper consists of introduction, body, conclusion and bibliography.
In the introduction the aim of the work is defined and the structure of the paper is described.
The body gives the definition of monopolistic competition, studies it main characteristics and comments on the main advantages and disadvantages of monopolistic competition.
Conclusion sums up the results of the study.
Bibliography comprises the list of references used when carrying out the work.
MONOPOLISTIC COMPETITION
Monopolistic competition is a type of imperfect competition such that competing producers sell products that are differentiated from one another as good but not perfect substitutes, such as from branding, quality, or location. In monopolistic competition, a firm takes the prices charged by its rivals as given and ignores the impact of its own
Pure monopoly and perfect competition are two extreme cases of market structure. In reality, there are markets having large number of producers competing with each other in order to sell their product in the market. Thus, there is monopoly on the one hand and perfect competition, on the other hand. Such a mixture of monopoly and perfect competition is called monopolistic competition. It is a case of imperfect competition.
The model of monopolistic competition describes a common market structure in which firms have many competitors, but each one sells a slightly different product. Monopolistic competition as a market structure was first identified in the 1930s by American economist Edward Chamberlin, and English economist Joan Robinson.
Many small businesses operate under conditions of monopolistic competition, including independently owned and operated high-street stores and restaurants. In the case of restaurants, each one offers something different and possesses an element of uniqueness, but all are essentially competing for the same customers.
The aim of the given work is the study of monopolistic competition. The paper consists of introduction, body, conclusion and bibliography.
In the introduction the aim of the work is defined and the structure of the paper is described.
The body gives the definition of monopolistic competition, studies it main characteristics and comments on the main advantages and disadvantages of monopolistic competition.
Conclusion sums up the results of the study.
Bibliography comprises the list of references used when carrying out the work.
MONOPOLISTIC COMPETITION
Monopolistic competition is a type of imperfect competition such that competing producers sell products that are differentiated from one another as good but not perfect substitutes, such as from branding, quality, or location. In monopolistic competition, a firm takes the prices charged by its rivals as given and ignores the impact of its own
Bibliography: 2. J. Gans, S. King, N. Gregory Mankiw, Principles of Economics, Thomson Learning, 2003 3