Chapter
13
Monopolistic
Competition
and
Oligopoly
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Monopolistic
Competition
Monopolistic
competition
Relatively
large
number
of
sellers
Product
differentiation
Easy
entry
and
exit
Nonprice
competition
like
advertising
LO
13-2
1
output of four largest
firms
4-firm CR
=
Monopolistically
Competitive
Industries
Industry
concentration
Measured by 4-firm concentration ratio
Percentage of sales by 4 largest firms
total output
industry
Herfindahl index
in
the
Sum
of
squared
market
shares
HI
=
(%S1)2
+
(%S2)2
+
(%S3)2
+
….
+
LO
1
(%Sn)2
13-3