What are the major features of monopolistic competition compared to pure competition and pure monopoly?
What will be an ideal response?
In monopolistic competition, there are a relatively large number of firms, not the thousands of firms as in pure competition. The monopolistic ally competitive firms produce differentiated products, not the standardized products of pure competition. Product differentiation means that monopolistic competitors engage in some price competition because they have some limited “price making” ability based on the less elastic demand for their particular product. This demand, however, is more elastic than the demand for monopolists’ products. Monopolistic competitors, unlike most monopolists and all purely competitive firms, will engage in non price competition that gets reflected in product quality, services, location, advertising, and packaging. Compared with monopoly, the barriers to entry for monopolistic ally competitive firms are minor. The firms typically are small in size, operate independently, and do not practice collusion.
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Since the 1970s, the incidence of obesity has risen from 15% of the U.S. population to
a. 20%. b. 25%. c. 30%. d. 35%. e. 50%. 12.Part of the cause of obesity is that food is cheaper; when something is cheaper a. The demand curve slopes upward. b. The demand curve slopes downward. c. Consumers demand more d. Consumers demand less e. Both b and c are correct.
Statistical studies in the United States have reached the conclusion that for low-income workers
A. the substitution effect is greater than the income effect. B. the income effect is greater than the substitution effect. C. the income effect is about equal to the substitution effect. D. the substitution effect is of the “wrong” sign.