Flashcards
Imperfect Competition
Cards in this deck (4)
- 1Firms in imperfect competition are not quite price takers because... (2)1. There are still some barriers to entry
2. There is some product differentiation - 2What are some examples of imperfect competition? (2)Oligopoly: few sellers, offering similar/identical products (Supermarkets/Banks)
Monopolistic Competition: Many firms selling products that are similar but not identical
(Films/Cafes) - 3What are the characteristics of monopolistic competition? (3)1. Differentiated products
2. Many sellers
3. Low barriers to entry
This means zero profits in the long-run. - 4What differs between perfect competition and monopolistic competition regarding economic efficiency?In the long-run perfect competition can be economically efficient but monopolistic competition will never be economically efficient.