Briefly discuss what product differentiation may involve with regard to a monopolistic competitor?

Solutions

Expert Solution

The firms in the monopolistic competitions indulge in non-price competition and product differentiation. That means because of intense competition the product of the firms operating under the monopolistic competition is more or less same i.e. the price. But, the other features of the product like packaging, branding, marketing, and other non-price things differentiate the product.

For example, 10 firms operating in the monopolistic competitive market will have more or less the same price for their product. But the marketing the firms are doing for their product will show how their particular product is different from the product of other firms in the market. They will have a very different packaging, the taglines for introducing their product will be different, they will highlight some extra features of their product etc.

All these are the forms of non-price product differentiation which the firms in a monopolistic market indulge in.

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

A) Define monopolistic competition, and discuss the importance of product differentiation. B) Give at least three...

A) Define monopolistic competition, and discuss the importance of product differentiation. B) Give at least three examples of monopolistically competitive industries. C) In each case, what is the basis of its product differentiation?

7. List and briefly describe the main characteristics of a monopolistic firm. 8. May a monopolistic...

7. List and briefly describe the main characteristics of a monopolistic firm. 8. May a monopolistic firm earn long profits? Why/Why not. 9. Show graphically a monopolistic firm earning short run profits. 10. Using the deadweight welfare loss diagram, explain the inefficiency involved when a competitive industry is monopolized. 11. List a briefly explain the primary anti-trust laws that deal with monopoly. 12. List several barriers to entry and explain the importance of them.

1. Provide me the characteristics of a monopolistic competitor. What must they do to be certain...

1. Provide me the characteristics of a monopolistic competitor. What must they do to be certain of their survival? 2. Technological advance is a 3 step process of intervention, innovation, and diffusion. Explain each step. Why is research and development so vital to the success of any firm? 3. Ologopolist have an interdepent relationship with their competition. Explain what this means. What is collusion and why are the ologoplist most vulnerable to this. 4. A pure monopoly has no competition...

Describe Monopolistic Competition Firms Behavior in regards to A.) Product Differentiation B.) Profit Margins C.) Brand...

Describe Monopolistic Competition Firms Behavior in regards to A.) Product Differentiation B.) Profit Margins C.) Brand Loyalty D.) Profit Maximization and E.) New Entrants to the Monopolistic Competitive Market. 4.) What is a Close Economy (definition)? Give an example of a closed economy nation. What is an Open Economy (definition)? Give an example of an open economy nation.

A monopolistic competitor has the following information about cost and demand. In the short run, what...

A monopolistic competitor has the following information about cost and demand. In the short run, what price will the monopolistically competitive firm charge? What quantity of output will they produce? And what profit would they obtain. Explain what you would expect to happen in the long run and why. Had this been data for a typical firm in a perfectly competitive market, what level of output and price would result? Quantity Price ($) Total Revenue ($) Marginal Revenue ($) Total Cost ($)...

What is product differentiation? Give examples. How does product differentiation influence buyer and supplier behaviors? How...

What is product differentiation? Give examples. How does product differentiation influence buyer and supplier behaviors? How does product differentiation influence your behavior?

Question