Monopolistic competition is characterized by many firms producing differentiated products. Each firm faces a downward-sloping demand curve and competes through quality, price, and marketing. In the short run, firms set price where marginal revenue equals marginal cost. In the long run, free entry and exit causes firms to earn zero economic profit. Firms invest in product development and heavy advertising to differentiate their products and shift their demand curves, though this may result in excess capacity and prices above marginal cost.
Novartis is a global healthcare company based in Switzerland that provides solutions to address the evolving needs of patients worldwide. Our mission is to discover new ways to improve and extend people’s lives. Our vision is to be a trusted leader in changing the practice of medicine.
Novartis is a global healthcare company based in Switzerland that provides solutions to address the evolving needs of patients worldwide. Our mission is to discover new ways to improve and extend people’s lives. Our vision is to be a trusted leader in changing the practice of medicine.
Brand Dossier for Saffola - Marketing ManagementSanjeev Sahu
The file contains-
1. ABOUT MARICO COMPANY
2. ADVERTISING, SALES PROMOTION &
SEGMENTATION STRATEGY
3.ANALYSIS OF THE PRODUCT
4. GENERIC COMPETETION OF THE BRAND
5. MARKET STRATEGY OF SAFFOLA
6. DISTRIBUTION STRATEGY
This Presentation provides information about the segmentation of oncology market worldwide, Global Oncology market analysis along with Indian Oncology market.
This presentation covers the following information - Indian Government initiatives,Market Challenges,Market Drivers and SWOT Analysis.
Brand Dossier for Saffola - Marketing ManagementSanjeev Sahu
The file contains-
1. ABOUT MARICO COMPANY
2. ADVERTISING, SALES PROMOTION &
SEGMENTATION STRATEGY
3.ANALYSIS OF THE PRODUCT
4. GENERIC COMPETETION OF THE BRAND
5. MARKET STRATEGY OF SAFFOLA
6. DISTRIBUTION STRATEGY
This Presentation provides information about the segmentation of oncology market worldwide, Global Oncology market analysis along with Indian Oncology market.
This presentation covers the following information - Indian Government initiatives,Market Challenges,Market Drivers and SWOT Analysis.
Monopolistic competition - The Four Types of Market Structure - EconomicsFaHaD .H. NooR
Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from one another (e.g. by branding or quality) and hence are not perfect substitutes. In monopolistic competition, a firm takes the prices charged by its rivals as given and ignores the impact of its own prices on the prices of other firms.[1][2] In the presence of coercive government, monopolistic competition will fall into government-granted monopoly. Unlike perfect competition, the firm maintains spare capacity. Models of monopolistic competition are often used to model industries. Textbook examples of industries with market structures similar to monopolistic competition include restaurants, cereal, clothing, shoes, and service industries in large cities. The "founding father" of the theory of monopolistic competition is Edward Hastings Chamberlin, who wrote a pioneering book on the subject, Theory of Monopolistic Competition (1933).[3] Joan Robinson published a book The Economics of Imperfect Competition with a comparable theme of distinguishing perfect from imperfect competition.
Monopolistically competitive markets have the following characteristics:
There are many producers and many consumers in the market, and no business has total control over the market price.
Consumers perceive that there are non-price differences among the competitors' products.
There are few barriers to entry and exit.[4]
Producers have a degree of control over price.
economics #ucp
What is 'Monopolistic Competition'
Characterizes an industry in which many firms offer products or services that are similar, but not perfect substitutes. Barriers to entry and exit in the industry are low, and the decisions of any one firm do not directly affect those of its competitors. All firms have the same, relatively low degree of market power; they are all price makers. In the long run, demand is highly elastic, meaning that it is sensitive to price changes. In the short run, economic profit is positive, but it approaches zero in the long run. Firms in monopolistic competition tend to advertise heavily.
BREAKING DOWN 'Monopolistic Competition'
Monopolistic competition is a middle ground between monopoly, on the one hand, and perfect competition (a purely theoretical state), on the other, and combines elements of each. It is a form of competition that characterizes a number of industries that are familiar to consumers in their day-to-day lives. Examples include restaurants, hair salons, clothing and consumer electronics. To illustrate the characteristics of monopolistic competition, we'll use the example of household cleaning products.
The Indian economy is classified into different sectors to simplify the analysis and understanding of economic activities. For Class 10, it's essential to grasp the sectors of the Indian economy, understand their characteristics, and recognize their importance. This guide will provide detailed notes on the Sectors of the Indian Economy Class 10, using specific long-tail keywords to enhance comprehension.
For more information, visit-www.vavaclasses.com
The Roman Empire A Historical Colossus.pdfkaushalkr1407
The Roman Empire, a vast and enduring power, stands as one of history's most remarkable civilizations, leaving an indelible imprint on the world. It emerged from the Roman Republic, transitioning into an imperial powerhouse under the leadership of Augustus Caesar in 27 BCE. This transformation marked the beginning of an era defined by unprecedented territorial expansion, architectural marvels, and profound cultural influence.
The empire's roots lie in the city of Rome, founded, according to legend, by Romulus in 753 BCE. Over centuries, Rome evolved from a small settlement to a formidable republic, characterized by a complex political system with elected officials and checks on power. However, internal strife, class conflicts, and military ambitions paved the way for the end of the Republic. Julius Caesar’s dictatorship and subsequent assassination in 44 BCE created a power vacuum, leading to a civil war. Octavian, later Augustus, emerged victorious, heralding the Roman Empire’s birth.
Under Augustus, the empire experienced the Pax Romana, a 200-year period of relative peace and stability. Augustus reformed the military, established efficient administrative systems, and initiated grand construction projects. The empire's borders expanded, encompassing territories from Britain to Egypt and from Spain to the Euphrates. Roman legions, renowned for their discipline and engineering prowess, secured and maintained these vast territories, building roads, fortifications, and cities that facilitated control and integration.
The Roman Empire’s society was hierarchical, with a rigid class system. At the top were the patricians, wealthy elites who held significant political power. Below them were the plebeians, free citizens with limited political influence, and the vast numbers of slaves who formed the backbone of the economy. The family unit was central, governed by the paterfamilias, the male head who held absolute authority.
Culturally, the Romans were eclectic, absorbing and adapting elements from the civilizations they encountered, particularly the Greeks. Roman art, literature, and philosophy reflected this synthesis, creating a rich cultural tapestry. Latin, the Roman language, became the lingua franca of the Western world, influencing numerous modern languages.
Roman architecture and engineering achievements were monumental. They perfected the arch, vault, and dome, constructing enduring structures like the Colosseum, Pantheon, and aqueducts. These engineering marvels not only showcased Roman ingenuity but also served practical purposes, from public entertainment to water supply.
Welcome to TechSoup New Member Orientation and Q&A (May 2024).pdfTechSoup
In this webinar you will learn how your organization can access TechSoup's wide variety of product discount and donation programs. From hardware to software, we'll give you a tour of the tools available to help your nonprofit with productivity, collaboration, financial management, donor tracking, security, and more.
2024.06.01 Introducing a competency framework for languag learning materials ...Sandy Millin
http://sandymillin.wordpress.com/iateflwebinar2024
Published classroom materials form the basis of syllabuses, drive teacher professional development, and have a potentially huge influence on learners, teachers and education systems. All teachers also create their own materials, whether a few sentences on a blackboard, a highly-structured fully-realised online course, or anything in between. Despite this, the knowledge and skills needed to create effective language learning materials are rarely part of teacher training, and are mostly learnt by trial and error.
Knowledge and skills frameworks, generally called competency frameworks, for ELT teachers, trainers and managers have existed for a few years now. However, until I created one for my MA dissertation, there wasn’t one drawing together what we need to know and do to be able to effectively produce language learning materials.
This webinar will introduce you to my framework, highlighting the key competencies I identified from my research. It will also show how anybody involved in language teaching (any language, not just English!), teacher training, managing schools or developing language learning materials can benefit from using the framework.
The Art Pastor's Guide to Sabbath | Steve ThomasonSteve Thomason
What is the purpose of the Sabbath Law in the Torah. It is interesting to compare how the context of the law shifts from Exodus to Deuteronomy. Who gets to rest, and why?
Palestine last event orientationfvgnh .pptxRaedMohamed3
An EFL lesson about the current events in Palestine. It is intended to be for intermediate students who wish to increase their listening skills through a short lesson in power point.
We all have good and bad thoughts from time to time and situation to situation. We are bombarded daily with spiraling thoughts(both negative and positive) creating all-consuming feel , making us difficult to manage with associated suffering. Good thoughts are like our Mob Signal (Positive thought) amidst noise(negative thought) in the atmosphere. Negative thoughts like noise outweigh positive thoughts. These thoughts often create unwanted confusion, trouble, stress and frustration in our mind as well as chaos in our physical world. Negative thoughts are also known as “distorted thinking”.
Synthetic Fiber Construction in lab .pptxPavel ( NSTU)
Synthetic fiber production is a fascinating and complex field that blends chemistry, engineering, and environmental science. By understanding these aspects, students can gain a comprehensive view of synthetic fiber production, its impact on society and the environment, and the potential for future innovations. Synthetic fibers play a crucial role in modern society, impacting various aspects of daily life, industry, and the environment. ynthetic fibers are integral to modern life, offering a range of benefits from cost-effectiveness and versatility to innovative applications and performance characteristics. While they pose environmental challenges, ongoing research and development aim to create more sustainable and eco-friendly alternatives. Understanding the importance of synthetic fibers helps in appreciating their role in the economy, industry, and daily life, while also emphasizing the need for sustainable practices and innovation.
How to Split Bills in the Odoo 17 POS ModuleCeline George
Bills have a main role in point of sale procedure. It will help to track sales, handling payments and giving receipts to customers. Bill splitting also has an important role in POS. For example, If some friends come together for dinner and if they want to divide the bill then it is possible by POS bill splitting. This slide will show how to split bills in odoo 17 POS.
2. After studying this chapter you will be able to
Define and identify monopolistic competition
Explain how output and price are determined in a
monopolistically competitive industry
Explain why advertising costs are high in a
monopolistically competitive industry
3. PC War Games
Globalization brings enormous diversity in products and
thousands of firms seek to make their own product special
and different from the rest of the pack.
Dell, Hewlett-Packard, Lenovo, Acer, and Toshiba
accounted for one half of the global market of $60 million
PCs in 2006.
Firms in these markets are neither price takers like those in
perfect competition, nor are they protected from
competition by barriers to entry like a monopoly.
How do such firms choose the quantity to produce and
price?
4. What Is Monopolistic Competition?
Monopolistic competition is a market with the following
characteristics:
A large number of firms.
Each firm produces a differentiated product.
Firms compete on product quality, price, and marketing.
Firms are free to enter and exit the industry.
5. What Is Monopolistic Competition?
Large Number of Firms
The presence of a large number of firms in the market
implies:
Each firm has only a small market share and therefore
has limited market power to influence the price of its
product.
Each firm is sensitive to the average market price, but no
firm pays attention to the actions of the other, and no
one firm’s actions directly affect the actions of other
firms.
Collusion, or conspiring to fix prices, is impossible.
6. What Is Monopolistic Competition?
Product Differentiation
Firms in monopolistic competition practice product
differentiation, which means that each firm makes a
product that is slightly different from the products of
competing firms.
7. What Is Monopolistic Competition?
Competing on Quality, Price, and Marketing
Product differentiation enables firms to compete in three
areas: quality, price, and marketing.
Quality includes design, reliability, and service.
Because firms produce differentiated products, each firm
has a downward-sloping demand curve for its own
product.
But there is a tradeoff between price and quality.
Differentiated products must be marketed using
advertising and packaging.
8. What Is Monopolistic Competition?
Entry and Exit
There are no barriers to entry in monopolistic competition,
so firms cannot earn an economic profit in the long run.
Examples of Monopolistic Competition
Figure 13.1 on the next slide shows market share of the
largest four firms and the HHI for each of ten industries
that operate in monopolistic competition.
9. What Is Monopolistic Competition?
Figure 13.1
shows examples.
The 4 largest
firms.
Next 4 largest
firms.
Next 12 largest
firms.
The numbers are
the HHI.
10. Price and Output in Monopolistic
Competition
The Firm’s Short-Run Output and Price Decision
A firm that has decided the quality of its product and its
marketing program produces the profit-maximizing
quantity at which its marginal revenue equals its marginal
cost (MR = MC).
Price is set at the highest price the firm can charge for the
profit-maximizing quantity.
The price is determined from the demand curve for the
firm’s product.
11. Price and Output in Monopolistic
Competition
Figure 13.2 shows a short-
run equilibrium for a firm in
monopolistic competition.
It operates much like a
single-price monopoly.
12. Price and Output in Monopolistic
Competition
The firm produces the
quantity at which marginal
revenue equals marginal
cost
and sells that quantity for
the highest possible price.
It makes an economic
profit (as in this example)
when P > ATC.
13. Price and Output in Monopolistic
Competition
Profit Maximizing Might
be Loss Minimizing
A firm might incur an
economic loss in the short
run.
Here is an example.
In this case, P < ATC.
14. Price and Output in Monopolistic
Competition
Long Run: Zero Economic Profit
In the long run, economic profit induces entry.
And entry continues as long as firms in the industry make
an economic profit—as long as (P > ATC).
In the long run, a firm in monopolistic competition
maximizes its profit by producing the quantity at which its
marginal revenue equals its marginal cost, MR = MC.
15. Price and Output in Monopolistic
Competition
As firms enter the industry, each existing firm loses some
of its market share. The demand for its product decreases
and the demand curve for its product shifts leftward.
The decrease in demand decreases the quantity at which
MR = MC and lowers the maximum price that the firm can
charge to sell this quantity.
Price and quantity fall with firm entry until P = ATC and
firms earn zero economic profit.
16. Price and Output in Monopolistic
Competition
Figure 13.4 shows a firm in
monopolistic competition in
long-run equilibrium.
If firms incur an economic
loss, firms exit to achieve
the long-run equilibrium.
17. Price and Output in Monopolistic
Competition
Monopolistic Competition and Perfect Competition
Two key differences between monopolistic competition
and perfect competition are:
Excess capacity
Markup
A firm has excess capacity if it produces less than the
quantity at which ATC is a minimum.
A firm’s markup is the amount by which its price exceeds
its marginal cost.
18. Price and Output in Monopolistic
Competition
Excess Capacity
Firms in monopolistic
competition operate with
excess capacity in long-
run equilibrium.
The downward-sloping
demand curve for their
products drives this result.
19. Price and Output in Monopolistic
Competition
Markup
Firms in monopolistic
competition operate with
positive mark up.
Again, the downward-
sloping demand curve for
their products drives this
result.
20. Price and Output in Monopolistic
Competition
In contrast, firms in perfect
competition have no
excess capacity and no
markup.
The perfectly elastic
demand curve for their
products drives this result.
21. Price and Output in Monopolistic
Competition
Is Monopolistic Competition Efficient
Because in monopolistic competition P > MC, marginal
benefit exceeds marginal cost.
So monopolistic competition seems to be inefficient.
But the markup of price above marginal cost arises from
product differentiation.
People value variety but variety is costly.
Monopolistic competition brings the profitable and possibly
efficient amount of variety to market.
22. Product Development and Marketing
Innovation and Product Development
We’ve looked at a firm’s profit-maximizing output decision
in the short run and the long run of a given product and
with given marketing effort.
To keep making an economic profit, a firm in monopolistic
competition must be in a state of continuous product
development.
New product development allows a firm to gain a
competitive edge, if only temporarily, before competitors
imitate the innovation.
23. Product Development and Marketing
Profit-Maximizing Product Innovation
Innovation is costly, but it increases total revenue.
Firms pursue product development until the marginal
revenue from innovation equals the marginal cost of
innovation.
24. Product Development and Marketing
Efficiency and Product Innovation
Marginal social benefit of an innovation is the increase in
the price that people are willing to pay for the innovation.
Marginal social cost is the amount that the firm must pay
to make the innovation.
Profit is maximized when marginal revenue equals
marginal cost.
In monopolistic competition, price exceeds marginal
revenue, so the amount of innovation is probably less than
efficient.
25. Product Development and Marketing
Advertising
Firms in monopolistic
competition incur heavy
advertising expenditures.
Figure 13.6 shows
estimates of the
percentage of sale price
for different monopolistic
competition markets.
Cleaning supplies and toys
top the list at almost 15
percent.
26. Product Development and Marketing
Selling Costs and Total Costs
Selling costs, like advertising expenditures, fancy retail
buildings, etc. are fixed costs.
Average fixed costs decrease as production increases, so
selling costs increase average total costs at any given
level of output but do not affect the marginal cost of
production.
Selling efforts such as advertising are successful if they
increase the demand for the firm’s product.
27. Product Development and Marketing
Advertising costs might
lower the average total
cost by increasing
equilibrium output and
spreading their fixed costs
over the larger quantity
produced.
Here, with no advertising,
the firm produces 25 units
of output at an average
total cost of $60.
28. Product Development and Marketing
The advertising
expenditure shifts the
average total cost curve
upward.
With advertising, the firm
produces 100 units of
output at an average total
cost of $40.
The firm operates at a
higher output and lower
average total cost than it
would without advertising.
29. Product Development and Marketing
Selling Costs and
Demand
In Figure 13.8(a), with no
advertising, demand is not
very elastic and the markup
is large.
In Figure 13.8(b),
advertising makes demand
more elastic, increases the
quantity and lowers the
price and markup.
30. Product Development and Marketing
Using Advertising to Signal Quality
Why do Coke and Pepsi spend millions of dollars a month
advertising products that everyone knows?
One answer is that these firms use advertising to signal
the high quality of their products.
A signal is an action taken by an informed person or firm
to send a message to uninformed persons.
31. Product Development and Marketing
For example,
Coke is a high quality cola and Oke is a low quality cola.
If Coke spends millions on advertising, people think “Coke
must be good.”
If it is truly good, when they try it, they will like it and keep
buying it.
If Oke spends millions on advertising, people think “Oke
must be good.”
If it is truly bad, when they try it, they will hate it and stop
buying it.
32. Product Development and Marketing
So if Oke knows its product is bad, it will not bother to
waste millions on advertising it.
And if Coke knows its product is good, it will spend millions
on advertising it.
Consumers will read the signals and get the correct
message.
None of the ads need mention the product. They just need
to be flashy and expensive.