In this lesson, our instructor Jibin Park gives an introduction on monopolistic competition. He discusses the characteristics of monopolistic competition, profitable and unprofitable firms in monopolistic competition, long-run zero profit equilibrium, comparing perfect and monopolistic competition, and product differentiation and advertising.
Monopolistic Competition is a market structure in which a large amount of firms compete to sell similar but not identical products.
In the long-run, there is no economic profit.
When drawing a monopolistically competitive firm in long-run equilibrium, the ATC will be tangent to the profit-maximizing point.
The minimum point of the ATC will intersect the MC just like in all the other previous graphs.
A monopolistically competitive firm is not allocatively efficient nor is it productively efficient.
People prefer to pay a higher cost for variety.
Lecture Slides are screen-captured images of important points in the lecture. Students can download and print out these lecture slide images to do practice problems as well as take notes while watching the lecture.
This book created a 5-step plan to help you study more effectively, use your preparation time wisely, and get your best score. This book includes two full-length practice exams modeled on the real test, all the terms and concepts you need to know to get your best score, and your choice of three customized study schedules.
This book includes an in-depth preparation for both AP economics exams. It features two full-length practice tests, one in Microeconomics and one in Macroeconomics, and all test questions answered and explained. It also features a detailed review of all test topics, which include: supply and demand, theory of consumer choice, economics in the public sector, costs, perfect and imperfect competition, monopolies, labor resources, game theory, the national income and gross domestic product, inflation and unemployment, fiscal policy, money and banking, monetary policy, economic growth, international trade and exchange, interest rate determination, and the market for loanable funds.