Question

1. Escoja un patio de comidas (foodcourt) del mall de su preferencia (por ejemplo, Plazas Las Américas) y explique, usando la teoría la estructura de mercado de competencia monopolística.
2. Escoja un monopolio privado o público (por ejemplo, AEE y AAA) y explique la estructura de mercado de monopolio.

English

Choose a food court from the mall of your choice as an example and explain the theory the market streak of monopolistic competition.

Choose a private or public "monopoly" as an example and explain the monopoly market structure

Answer 1

1. The best example of monopolistic competitive firms could be Burger King and McDonald which almost sell the same kind of products which are not close substitute to each other. Which product to choose is completely dependent on the tastes & preferences, pricing decision of the consumer. They sell the same kind of products which offer different tastes which basically forms the market structure of the Monopolistic competition. So, these firms are rigorously competitive on several other factors but not only on pricing.

2. Monopoly is market where there will be only one owner of the product in the market. For example, Microsoft and Windows where there are no close substitutes to it. These firms are given the exclusive right by the government to produce the product. These firms can grab any percentage of market share and fix its prices. But it should decide to sell at lower and acceptable prices in order to sell more of its products. Generally these firms chose an output level where MR=MC and this is the basic strategy of a profit maximizing firm in monopoly.