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  • What is monopolistic competition?

    In monopolistic competition, there are many small firms who all have minimal shares of the market. Firms have many competitors, but each one sells products that are not considered “identical”.  Characteristics of monopolistic competition include: Product Differentiation – The product of a firm is similar, but not an exact substitute for another firm. This differentiation...

  • What are the four types of market structures?

    The four types of market structures include perfect competition, monopolistic competition, oligopoly, and monopoly. Each of these four have their own set of characteristics and assumptions, and will thus, affect the decisions of firms regarding the amount of profits that they can earn.

  • What is perfect competition in economics?

    Perfect competition describes a market structure where a large number of small firms compete against each other. In this scenario, a single firm does not have any significant market power. As a result, the industry as a whole produces the socially optimal level of output, because none of the firms can influence market prices.