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December 2, 2021

what is a good example of a good or service sold in a monopolistically competitive market?

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Question1

Next time you are shopping at the supermarket (or imagine you are there), what is a good example of a good that is sold in an oligopoly market? What is the good? What are the major manufacturers (be sure to turn the package over so you are now confusing brand names with the manufacturer)? Which characteristics of an oligopoly market are shown here (few dominant producers; identical prices; sticky prices; high barriers to entry)?

Question 2

Based on your experience in your neighborhood, what is a good example of a good or service sold in a monopolistically competitive market? What is the good or service? Which characteristics of a monopolistically competitive market are shown here (many firms, differentiated products, low barriers to entry, low profits in long run, inefficient production)?

Question 3

What are the relative advantages of buying a good or service produced by a firm in an oligopoly market structure versus the relative advantages of buying a good or service by a firm in a monopolistically competitive market structure? Use real life examples in your answer (they may be the same as in questions 1 and 2, or different).

Question 4

In the following diagrams, what will be the price? The quantity sold? The profit or loss? Explain how you found your answers.

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