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Monopolistic competition

The form of economic competition known as Monopolistic competition occurs when:

  1. There are many producers and many consumers in a given market.
  2. Consumers have clearly defined preferences - the goods and services are heterogeneous
  3. Freedom of entry.

A monopolistically competitive firm acts similar to monopolists in the short run, but in the long run has no profits and excess capacity.

See also

Science Fair Project Encyclopedia Contents Page
09-23-2007 01:00:40
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