How do firms in monopolistic competition compete?
What will be an ideal response?
Firms in monopolistic competition compete in three areas: Quality—the physical attributes of a product, including the product's design and reliability, the service provided with the product, and the ease of access to the product; price—because the firms produce differentiated products, each firm faces a downward-sloping demand curve for its own product; and marketing—firms must make consumers aware of the quality of their differentiated products through advertising and packaging.
You might also like to view...
Welfare economics is the study of how the allocation of resources affects economic well-being. a. the allocation of resources affects economic well-being. b. price controls work
c. the government helps poor people. d. to produce greater equality.
The elasticity of supply is defined as the ________ change in quantity supplied divided by the _______ change in price.
a. total; percentage b. percentage; marginal c. marginal; percentage d. percentage; percentage