II. Monopolistic competition
III. Economic analysis of monopolistic competition
A. P is high compared to pure competition (P> MR = MC)
B. Quantity will be restricted causing ATC to be higher than that indicated by the curve's lowest point.
C. Tends to be more competitive than monopoly and oligopoly.
D. Some believe economic profit tends toward zero as the number of firms adjust to varying profit levels.
E. Econ Concepts in 60 Seconds Video on Monopolistic Competition in the Long-Run
|Informs potential customers||Persuades potential|
|Finances national communication||Social costs (billboards)|
|Rewards and thus stimulates technological advancement and innovation||Adds little to a product|
|Increases output resulting in economies of scale and lower ATC||Ads cancel each other's effect, output doesn't change, ATC increases|
|Promotes spending and employment||Promotes of spending can not be proven.|
|Consumer Protection, False Advertising from the Florida Attorney General.|
V. Monopolistic competition in international trade - from wiki
VI.A free business game about monopolistic competition from Economics Web Institute
VII. Monopolistic Competition and Oligopoly multiple choice practice questions.
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