Market Structures: Monopolistic Competition - 754 Words | Essay Example (2024)

FAQs

What is an example of a monopolistic competition market structure? ›

Restaurants, hair salons, household items, and clothing are examples of industries with monopolistic competition. Items like dish soap or hamburgers are sold, marketed, and priced by many competing companies.

a common market structure where many competing producers sell products that are differentiated from one another (ie. the products are substitutes, but are not exactly alike). Examples of monopolistic competitive markets are restaurants, cereals, clothing and shoes.

Detailed Solution. The correct answer is Market for soaps. It occurs when an industry has many firms offering products that are similar but not identical. Therefore, the market for soaps in India is an example of a typical example of monopolistic competition.

Monopolistic competition refers to a market where many firms sell differentiated products. Differentiated products can arise from characteristics of the good or service, location from which the product is sold, intangible aspects of the product, and perceptions of the product.

Monopolistically competitive industries are those that contain more than a few firms, each of which offers a similar but not identical product. Take fast food, for example. The fast food market is quite competitive, and yet each firm has a monopoly in its own product.

A monopolistic market is a theoretical condition that describes a market where only one company may offer products and services to the public. A monopolistic market is the opposite of a perfectly competitive market, in which an infinite number of firms operate.

Answer and Explanation: Large retail stores like Walmart are an example of an oligopoly market structure.

The correct answer is (a) restaurants. A monopolistic competitive market combines the features of a monopoly and those of perfectly competitive firms.

McDonald's is a commonly used example of monopolistic competition. Monopolistic competition signifies the variety in the products available in the market.

Monopolistic competition is a type of imperfect competition such that there are many producers competing against each other, but selling products that are differentiated from one another (e.g. by branding or quality) and hence are not perfect substitutes.

Why restaurant is an example of monopolistic competition? ›

The restaurant industry (monopolistically competitive nationwide) provides an example of a monopolistically competitive market. In most areas, there are many firms, each is different, and entry is easy. Each product has many close substitutes sold by different firms, including other restaurants, fast-food outlets.

Note that one of the defining traits of a monopolistic competitive market is a significant amount of non-price competition. I.e., firms cannot compete on prices. For example, a street vendor offers coffee at $0.5 per coffee cup, but Starbucks charges about $5 for a single cup of coffee.

Fast food restaurants, hotels, gas stations, clothing stores, medical practices, legal firms, and hair salons are several industries that are monopolistically competitive, assuming they locate in areas with other companies that serve the same clientele.

The advantages of monopolistic competition include: Product differentiation: In monopolistic competition, firms can differentiate their products, which means they can offer unique products to consumers that may not be available in a perfectly competitive market.

Expert Answer. The pizza industry is most likely to be a monopolistic competitive market. There are many sellers in the market which implies that each seller produces a small portion of the total output.

A US Congressional Report found that Apple exerted “monopoly power” in the mobile App Store market by favoring its apps and disadvantaging its rivals. Moreover, Apple's supremacy hurts innovation and choices for consumers through increased prices.

In essence, monopolistically competitive markets are named as such because, while firms are competing with one another for the same group of customers to some degree, each firm's product is a little bit different from that of all the other firms, and therefore each firm has something akin to a mini-monopoly in the ...

Natural gas, electricity companies, and other utility companies are examples of natural monopolies. They exist as monopolies because the cost to enter the industry is high and new entrants are unable to provide the same services at lower prices and in quantities comparable to the existing firm.

A monopolistically competitive firm is not productively efficient because it does not produce at the minimum of its average cost curve. A monopolistically competitive firm is not allocatively efficient because it does not produce where P = MC, but instead produces where P > MC.

What makes a company monopolistic? ›

Monopolies FAQs

A monopoly is when one company and its product dominate an entire industry whereby there is little to no competition and consumers must purchase that specific good or service from the one company.

Among other things, the judge said that Apple's restrictive rules on app distribution were justified because they improve security and privacy. And the judge ruled that Apple doesn't have monopoly power because customers can choose Android phones instead.

Though Amazon may be dominant on its platform, with a steady stream of entrants into the market, it still allows competition to occur. Although its size is large, when analyzing Amazon's actions through the lens of the current definition of a monopoly from the Federal Trade Commission, Amazon is not a monopoly.

The market structure for Home Depot is a dominant firm oligopoly.

The best examples of monopolistic competition are provided by retailing in urban areas. Grocery stores, gas stations, restaurants are all examples of firms in markets which approximate monopolistic competition.

There are several forms of imperfect competition, of which Monopolistic Competition is one. To best explain this, let us think of shoes as a perfect example. Nike, Adidas, Reebok and many other brands all sell basketball shoes at approximately the same price.

The characteristics of monopoly include: (1) one firm, (2) one product, and (3) no entry (Table 5.1).

The market structure that Netflix operates under is an oligopoly. In an oligopoly, there are a few companies that control the entire market. In the streaming market, Netflix, Hulu, and Amazon Are the main competitors. In this type of market, price wars have a chance of occurring.

A real-life example of monopolistic competition would be the carbonated soft drink beverage industry, where incumbents such as Coca-Cola compete on branding and advertising.

Starbucks and McDonald's are two companies that operate in markets with monopolistic competition as there are other firms that offer similar products as each of them.

Which of the following is true about monopolistic competition? ›

Monopolistic competition is a competition where there are large number of sellers who sell related products which are no close substitutes of each other. Also there is no barriers of entry. Hence, the statement is true.

Hairdressing is also a good example of monopolistic competition. Salon and barbershop owners acquire a reputation based on the services they offer. Those with exceptional services usually build a good reputation, which attracts customers to their shops.

Examples: toothpaste, soft drinks, clothing as they all are hom*ogeneous products with many buyers and sellers, no to low entry barriers but are different from each other due to quality, taste, branding.

Product differentiation is a key characteristic of a monopolistically competitive market. The market for KFC, Nandos, and Chicken Licken represents a monopolistically competitive market because there are many sellers (restaurants) selling products (food) with different taste and quality.

Characteristics of monopolistic competition

Wendy's is considered a monopolistic competitive firm being that it contains all of its characteristics. When the monopolistically competitive market is making a profit, firms enter the market to take advantage of the economic profits.

The company is an oligopoly. This is a market structure that is dominated by a few sellers; each firm is large enough to make price changes in the market. This type of market structure enables Target to react to changes that competitors, like Walmart, apply to their prices and offerings.

YES! Companies that sells goods like toothpaste, shampoo, soap, toilet paper– firms that advertise (but have basically the same product) and claim their product is superior to competitors products are monopolistically competitive firms!

Monopolistic competition would represent the market structure within which Coca-Cola and Pepsi Cola firms operate. The given statement is FALSE. Pepsi and coca-cola work in the oligopoly market structure as they are dominant firms in the market where there are other small local firms also.

1. Public utilities: gas, electric, water, cable TV, and local telephone service companies, are often pure monopolies. 2. First Data Resources (Western Union), Wham-O (Frisbees), and the DeBeers diamond syndicate are examples of "near" monopolies.

Amazon's Trickle-Down Monopoly shows that it is by eliciting and constraining the agency of small business owners — rather than simply eliminating them — that Amazon has gained its power over global retail. In the process, countless small businesses across the world have made themselves in Amazon's image.

Which company is not an example of a monopolistic competition? ›

Answer and Explanation: The correct answer is d. lettuce farmers. They sell identical products while in a monopolistic competition market, there is product differentiation.

Ans. a) Taco Bell operate in Monopolistic competition. Where there are many buyer and sellers, and production and sell is of slightly differentiated products.

The rice sector is regulated by the National Food Authority (NFA), with imports under a statutory monopoly.

The market for for refrigerators is an oligopoly.

1.19 Conclusion

Monopolistic competition involves many buyers and sellers of products that are closely related, but not identical where entry and exit are easy. It is the dominant form of competition. Entrepreneurship is the best method for competing in monopolistically competitive environments.

Starbucks and McDonald's are two companies that operate in markets with monopolistic competition as there are other firms that offer similar products as each of them.

1. Grocery stores: Grocery stores exist within a monopolistic market as there are a large number of firms that sell many of the same goods but with distinct branding and marketing. 2. Hotels: Hotels offer a prime example of monopolistic competition.

Coca-Cola is not a monopolistic competition because it operates in an oligopoly market structure. Oligopoly is a market structure where a few large firms dominate the market and can influence prices. Coca-Cola competes with other major soft drink brands such as Pepsi, Dr. Pepper, and Sprite.

The size of Walmart in comparison to its competitors gives Walmart the characteristic of a monopoly.

Is TV a monopolistic competition? ›

A cable television service is a monopolistic competitive service.

In regard to McDonald's, the Golden Arches is more likely to be engaged in monopolistic competition rather than oligopolistic. This is because the fast food chain offers similar products to other burger joints like Burger King and Wendy's and is in a fierce battle with its peers on price and brand recognition.

The beer market is considered to be an oligopoly market because there are only few firms that have control over the whole market. Each firm is considered to be independent, with single actions having significant effect on the market.