IB Economics Topic 2.11.8 Monopolistic Competition Revision Notes (HL)

IB Economics Topic 2.11.8 Monopolistic Competition Revision Notes (HL) | RevisionDojo

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As mentioned before, monopolistic competition differs from perfect competition as it has some market power and some product differentiation
This means that firms in monopolistic competition can affect the price, hence having a downwards sloping demand curve.
This demand curve is more elastic than in monopoly, but less elastic than in perfect competition.

Profit Maximization for Monopolistic Competition

Short Run Profit

In the short run, a firm in a monopolistic competition would earn a profits similar to a monopolist.
1. Abnormal profit
2. Normal profit
3. Loss
The only difference is that the demand curve of monopolistic competition is more elastic

Long Run Profit

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Excepteur sint occaecat cupidatat non proident

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Lorem ipsum dolor sit amet, consectetur adipiscing elit.
Sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris.
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum.

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As mentioned before, monopolistic competition differs from perfect competition as it has some market power and some product differentiation
This means that firms in monopolistic competition can affect the price, hence having a downwards sloping demand curve.
This demand curve is more elastic than in monopoly, but less elastic than in perfect competition.

Profit Maximization for Monopolistic Competition

Short Run Profit

In the short run, a firm in a monopolistic competition would earn a profits similar to a monopolist.
1. Abnormal profit
2. Normal profit
3. Loss
The only difference is that the demand curve of monopolistic competition is more elastic

Long Run Profit

Definition

Paywall

(on a website) an arrangement whereby access is restricted to users who have paid to subscribe to the site.

anim nostrud sit dolore minim proident quis fugiat velit et eiusmod nulla quis nulla mollit dolor sunt culpa aliqua

Duis aute irure dolor in reprehenderit

Note

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam quis nostrud exercitation.

Excepteur sint occaecat cupidatat non proident

Tip

Lorem ipsum dolor sit amet, consectetur adipiscing elit.
Sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris.
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum.

1. Introduction to Economics2 subtopics

2. Microeconomics12 subtopics

3. Macroeconomics7 subtopics

4. The Global Economy10 subtopics

IB Economics 2.11.8 Monopolistic Competition Notes

1. Introduction to Economics2 subtopics

2. Microeconomics12 subtopics

3. Macroeconomics7 subtopics

4. The Global Economy10 subtopics

Profit Maximization for Monopolistic Competition

Short Run Profit

Long Run Profit

anim nostrud sit dolore minim proident quis fugiat velit et eiusmod nulla quis nulla mollit dolor sunt culpa aliqua

Duis aute irure dolor in reprehenderit

Excepteur sint occaecat cupidatat non proident

Unlock the rest of this chapter with a free account

Profit Maximization for Monopolistic Competition

Short Run Profit

Long Run Profit

anim nostrud sit dolore minim proident quis fugiat velit et eiusmod nulla quis nulla mollit dolor sunt culpa aliqua

Duis aute irure dolor in reprehenderit

Excepteur sint occaecat cupidatat non proident

Unlock the rest of this chapter with a free account