ECON 101 Lecture Notes - Lecture 17: Marginal Cost, Demand Curve, Marginal Revenue
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ECON 101 Full Course Notes
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Chapter 14: how firms behave when they have market power: monopolistic competition. Decide how much to produce and how much to charge when the market is not perfectly competitive. Monopolistic competition a market in which there are many firms that sell similar but not identical products. Major difference from perfectly competitive markets is that the product of one firm can be differentiated from the product of another firm. Branding giving a specific name, logo, or style to a product so consumers can identify it: establishing a brand name and reputation tells consumers what to expect. Trademark a brand name or logo that is legally protected. Advertising companies communicate with consumers to convince them to purchase a product: build brands to differentiate product. Demand and marginal revenue for a monopolistically competitive firm. Firms in a monopolistically competitive market face a downward sloping demand curve. Each firm is a price maker, setting the price for its own distinct product.
