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Market Structure & Pricing (Monopolistics Competition) - Coggle Diagram
Market Structure & Pricing
(Monopolistics Competition)
Structure with many firms selling products that are
substitutes but different enough that each firm's demand curve slopes downward
firm entry is relatively easy
Product differentiation
Location
Services
Physical differences
Product image
Short-run Profit Maximazition or Loss Minimization
No supply curve
As long as P > AVC, keep producing
Mr = MC
If P < AVC, shut down
Zero Economic Profit in the Long-run
happens because market entry is easy
Monopolistic Competition vs Perfect Competition
Monopolistic competition charges more & makes less than Pure competition
Monopolic competition spend more to differentiate theis products
In long-run both earn zero economic profit
