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oligopoly
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describes a market with only a few firms that sell a product that may or may not be completely standardized, but is similar enough that they're in competition.
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Interactions between a firm and its rivals in an oligopoly have a
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major impact on success
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In a perfectly competitive market, other firms' actions
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cannot affect the market
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Monopolistic competition
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describes a market with many firms that sell goods and services but are similar, but slightly different.
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product differentiation
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making a product that consumers perceive to be different from the products of their competitors
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imperfect competition includes the market structures of
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monopolistic competition and oligopoly
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monopolistic competition describes markets with
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many firms that sell goods and services that are similar, but slightly different.
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monopolistically competitive firms make economic profits by persuading (blank) that their product is (blank) from the products of their competitors.
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consumers. different
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monopolistically competitive firms have an interest in persuading customers that their products are unique through
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advertising and branding
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because a monopolistically competitive firm cannot adjust its price without causing a change in the quantity consumers demand, the
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demand curve is downward-sloping.
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assuming that production involves both fixed and marginal costs, monopolistically competitive firms face a
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u-shaped average total cost curve
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the profit-maximizing (blank) is determined by the point on the demand curve that corresponds to the profit-maximizing (blank)
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quantity, price
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the steepness of the (blank) curve is determined in part by the degree of substitutability between products
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demand
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a monopolistically competitive firm can earn (blank) economic profits in the short run
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positive
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for all its similarities to a monopolist in the short run, the monopolistically competitive firm faces one huge problem that the monopolist does not
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other firms can enter the market
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other firms have an incentive to enter the market when existing firms
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are making positive economic profits
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imperfect competition includes the market structures of
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monopolistic competition and oligopoly
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(blank) describes markets with only a few firms
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oligopoly
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if you are in charge of a company in an oligopoly, it is vital to
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keep an eye on competitors
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a monopolistically competitive firm cannot adjust its (blank) without causing a change in the (blank) consumers demand
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price, quantity
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monopolistically competitive firms face a downward-sloping (blank) curve
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demand
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just like for a monopoly, for a monopolistically competitive firm
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marginal revenue is less than price, marginal cost is less than price, marginal revenue is below the demand curve
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regulating a monopolistically competitive market to increase efficiency is difficult because
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there are too many slightly different products to regulate each product. there are too many firms in the market to regulate each one.
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in the long run, firms in a (blank) competitive market face the same situations firms in a (blank) competitive market in that profits are driven to zero
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monopolistically, perfectly
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firms have an incentive to persuade customers that their products cannot easily be substituted with a rival product because product differentiation enables monopolistically competitive firms to
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keep making economic profits in the short run
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when one strategy is always the best for a player to choose, regardless of what to her players do, we call it a (blank) strategy
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dominant
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zero profit means that
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total revenue is exactly equal to total cost
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because advertising costs money, it can give
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high-quality firms a way to credibly signal the quality of their products
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more firms making more products that are similar to the original product means
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consumers have a wider range of substitutes
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in oligopoly, the price effect is smaller when there are (blank) firms
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more
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when a number of firms collude to make a collective production decision about quantities or prices it is called a
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Cartel
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in the (blank)-run, monopolistic competition has some features in common with monopoly, and others in common with perfect competition
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long
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monopolistic competition is inefficient because
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some mutually beneficial trades do not occur
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monopolistically competitive firms want to sell more because price is (blank) than (blank) cost, so selling more would add to profits
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higher, marginal
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because consumers know that firms stand to lose when their brand's reputation is damaged, they can conclude that firms with
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strong brands probably have strong quality control
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unlike (blank) competition, oligopolistic competition does not necessarily drive (blank) all the way down to the efficient level.
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perfect, profits
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because the market outcomes in a competitive oligopoly are between those of a (blank), deadweight loss still exists, but it is lower than where there is collusion
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monopoly and a perfectly competitive market
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