To what extent are hairdressers a good example of firms operating under monopolistic competition?
Which of the following markets/industries are closest to the economists d definition of monopolistic competition – you may select more than one:
- Petrol retailers
- Independent electrical retailers
- Coffee growers in Brazil
- Electricity generating firms
- Retail banks
Draw separate diagrams to show a firm under monopolistic competition making supernormal profits in the short run and normal profits in the long run.
Evaluate monopolistic competition as a market structure.
Question 5 – Multiple choice
Which of the following options, 1 – 5, are true for the statement ‘A firm in long run equilibrium under monopolistic competition will exhibit‘:
- Allocative but not productive efficiency
- Productive but not allocative efficiency
- Neither productive nor allocative efficiency
- Super-normal profits
- Both allocative and productive efficiency