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characteristic of monopolistic competition
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relatively easy entry
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a monopolistically competitive industry is like a purely competitive industry in that
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neither has significant barriers to entry
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Monopolistic Competition is characterized by firms
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producing differentiated products
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One difference between monopolist competition and pure competition is that
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there is some control over price in monopolistic competition
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entry to the industry is
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more difficult than under pure competition but not nearly as difficult as under pure monopoly
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demand and marginal revenue curves are downward-sloping for monopolistically competitive firms because
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product differentiation allows each firm some degree of monopoly power
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a monopolistically competitive firm's marginal revenue curve
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is downward slopping and lies below the demand curve
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assume that in a monopolistically competitive industry, firms are earning economic profit. This situation will
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attract other firms to enter the industry, causing the existing firms' profits to shrink
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in the long run, the economic profits for a monopolistically competitive firm will be
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the same as the profits for a purely competitive firm
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monopolistic competitive firms are productively inefficient because production occurs where
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average total cost is not at its lowest
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if monopolistically competitive firms in an industry are making an economic profit, then new firms will enter the industry and the product demand facing existing firms will
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decrease
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in an oligopolistic market there are
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few sellers
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a unique feature of an oligopolistic industry is
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mutual interdependence
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a major distinction between a monopolistically competitive firm and an oligopolistic firm is that
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a recognized interdependence exists between firms in one industry but not in the other
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marginal revenue product measures the
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amount by which the extra production of one more worker increases a firm's total revenue
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marginal resource cost is
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the increase in total resource cost associated with the hire of one more unit of the resource
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a firm will find it profitable to hire workers up to the point at which their
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marginal resource cost is equal to their MRP
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the demand for capital by a firm is based on the demand for the product that the capital produces. This relationship is referred to as
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derived demand
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assuming a firm is selling its output in a purely competitive market, its resource demand curve can be determined by
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multiplying marginal product by product price
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the labor demand curve of an imperfectly competitive seller is downward sloping
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because of both diminishing returns and the necessity to lower price to sell more output
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a competitive employer will hire inputs up to the point where the
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price of the input equals the marginal revenue product of the input
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the labor demand curve of a firm
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will shift to the left if the price of the product the labor is producing falls
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as the baby boomers in America grow old, the demand for health-care workers increases. which example of a determinant of labor demand
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an increase in product demand
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