Chapter
24
Monopolistic
Competition
Copyright
2002 by The McGraw­Hill Companies, Inc.
All rights reserved.
24­1
Chapter
Objectives
The
monopolistic
competitor
in
the
short
and
long
runs
Product
differentiation
The
characteristics
of
monopolistic
competition
Price
discrimination
Copyright
2002 by The McGraw­Hill Companies, Inc.
All rights reserved.
24­2
Monopolistic
Competition
Defined
A monopolistically competitive industry
has many firms selling a differentiated
product
Differentiated means the buyer, for whatever
reason, make a difference between one
product and another
Identical means the buyer makes no difference between one
product and anther product
No one
price
firm
has
any
significant
influence
on
Copyright
2002 by The McGraw­Hill Companies, Inc.
All rights reserved.
24­3