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Essay / Research Paper Abstract
A 14 page paper that begins by providing specific definition. The essay goes on to explain perfect competition, monopolistic competition and oligopolistic competition. The focus and emphasis of the paper is monopolistic competition. The writer comments on equilibrium in two market structures. Product differentiation is explained emphasizing the need for companies in a monopolistic competitive market structure to differentiate, particularly as substitutes enter the market. Some examples are included to illustrate. The writer also comments on economic welfare cost, on antitrust regulations and natural monopolies. Bibliography lists 8 sources.
Page Count:
14 pages (~225 words per page)
File: MM12_PGmonpl.rtf
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Unformatted sample text from the term paper:
A market structure where there is just one seller of a product or service (Deardorff, 2005). * Monopolistic: The seller has some amount of power to set the price for
goods or services (Deardorff, 2005). * Monopolistic competition: This is market structure where there are many sellers, each of whom produces a differentiated product. Each company sets its own price
and supply quantity but each company is too small for their price and quantity to matter to the other producers in the industry (Deardorff, 2005). * Economic Welfare typically
refers to the total surplus available. If the cost drops, welfare rises. One theory is that active competition leads to efficiency and therefore economic welfare. * Differentiated products: This
means that one product can be a substitute for anther although it is not the exact same thing or a perfect substitute (McCain, 2005). Monopolistic Competition and
Product Differentiation A "perfect competition" or P-Competitive market is an idealized one in which four distinct characteristics exist: 1. Many buyers and sellers (McCain, 2005). 2. A homogenous product
(McCain, 2005). 3. Sufficient knowledge (McCain, 2005). 4. Free entry (McCain, 2005). This type of market is identified as idealized because it is very difficult to achieve. For example, even
if the first three characteristics are present, most markets today are difficult to enter. McCain comments that imperfect competition can exist in "an industry if the industry deviates from any
one of the four" (2005). If more than one company in an industry deviates from the first characteristic, that industry is considered to be an oligopoly (McCain, 2005; Minnesota State
University, 2002). An oligopolist often joins a cartel, joining other companies in the same industry to create a group (Minnesota State University, 2002). In this way, the group becomes similar
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