Monopolistic Competition & Oliogopoly

• Many buyers & many sellers
• Diferentiated products
• Easy entry/exit of firms
• Price Seekers

• Many buyers & few large sellers
• No easy entry ino business
• Both differentiated and homogeneous goods
• Price Seekers
• EP > 0 in long run

Process of creating real or apparent differences between goods and services

Advertising, packaging, product development, better quality, and better services

Action by one firm may cause a reaction on the part of other firms

Occurs when a dominant firm in an industry raises or lowers its prices, and other firms follow suit

Formal agreement among firms to set prices and output quotas

A market structure between the extremes of perfect competition and monopoly

Faces an oligopolist that assumes rivals will match a price decrease, but ignores a price increase

Yes, as long as there are only a few firms producing that product or service