Market

Structures Monopolistic Competition

Given the assumptions:

There are a large number of firms.
There are no barriers to entry or exit to the market.
There is product differentiation.
a. Physical
b. Quality
c. Location
d. Services
e. Product image

Answer the following questions. You have enough previous knowledge
to complete this task.
1. Comparing the Demand curves of Monopoly and Monopolistic
Competition which Market Structure do you believe has more
elastic demand: Monopoly or Monopolistic Competition? Why?

2. From our trip to the Coca-Cola, how many different ways does
Coca-Cola in Tanzania differentiate their products?

3. Given the assumption: There are no barriers to entry or exit to
the market, what do you think can happen to firms in the short-
run? Long-run?

4. Is Economic Profit, Normal Profit and Economic Loss possible in
both the short and long-run? Explain.

Given the following information construct the graph:

1. They are Price-Makers
2. Dont forget Marginal Cost Curve
3. The firms aim is to maximize profits be sure to show what
quantity this occurs at on the graph
4. Dont forget to show the Price the firm receives.
5. Graph all possible outcomes for firms in the short-run?
6. Graph all possible outcomes for firms in the long-run?
7. Are these types of firms allocatively efficient? Are they
Productively Efficient? Be sure to provide an explanation of why?

Market Structures Monopolistic Competition