Is a 24/7 gym comes in monopolistic or perfect competitive market?
Its quite hard to understand the exact question, but it seems straight forward.Perfect competition implies perfect information, homogeneous products, no transaction costs and so on. Unfortunately these criteria NEVER fully realize in the real world, which means the vast majority of markets are monopolistic competition. In these markets firms have similar products, but not quite so each has some individual demand curve, rather than an exogenous market price.A 24/7 gym is no exception. Its not perfect competition, it couldnt possibly be - each gym has its own set of equipment, location, payment system, even colors of walls and cleanliness of showers and lockers, which all come together to form those small differences that make firms services similar, but not the same, resulting in unique demand and price for each.I hope this answer helps
Why is monopolistic competition less efficient than perfect competition?
Perfect competition implies that all goods supplied are exactly the same, meaning that the price is the sole determinant in the market. The market for a particular stock is a good example of perfect competition. In monopolistic competition, firms compete on a variety of things, and while there may be substitutes for a given firms product, there is no perfect equivalent. An example is the restaurant business, where each firm provides a unique menu and food items to choose from, but there are still suitable substitutes in the market. Economic profit is possible in monopolistic competition, so in that sense it is less efficient, but if firms were forced to solely compete on price, the consumer's tastes would not be met as well, which implies greater efficiency. So, overall, it depends.
Perfectly competitive firm vs. monopoly?
The perfectly competitive firm is a price taker. The can sell all they want at the market price, but cannot sell anything at a higher price. If they decrease the price, they lose revenue. They can sell all they want because they are small in relation to the market. Their individual increase or decrease in Qs makes basically no difference to the market. Their combined supply is the market supply. a monopoly has total control over either the price of quantity it sells. Its supply curve is the market supply curve. It must lower its price to sell more because it sets the market price. As the market price decreases, Qd increases.
Which are more economically efficient, perfectly competitive markets or monopolies?
Compared to monopolies, perfectly competitive markets are... A) more economically efficient because they result in more economic surplus B) less economically efficient because they produce where marginal revenue is less than marginal cost C) less economically efficient because they result in less economic surplus D) less economically efficient because they result in less deadweight loss E) more economically efficient because they produce at lower average total cost
What is a monopolistic competition in a market context?
Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from each other. Common example can include restaurants that are selling same type of food but they all have different chef thus the taste of food is different.Monopolistically competitive markets exhibit the following characteristics:Each firm makes independent decisions about price and output, based on their cost of production.Knowledge about pricing is widely known but not perfect. Since products are differentiated too, firms can apply markup to their products even though they seems the same. For example, restaurant with tasty food can sell their food at a higher price compared to other normal restaurant.There is freedom to enter or leave the market, as there are no major barrier to entry or exit like monopoly.Monopolistic firm follows the MC=MR rule to maximise profit. not P=MC which is followed by perfect competition.There are usually a large numbers of independent firms competing in the market.Hope you can understand monopolistic competition better now!
Perfect Competition versus Monopoly?
Which market structure is better in terms of social aspect and benefits? I would think the perfect (pure) competition is better off than the monopoly, because the monopoly market only sells a few of their products at a high price, whereas the perfect competition market sells a lot of its product for a low cost. Is that right?
What is a monopolistic competitive market? Plz explain fully?
Monopolistic competition is 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 competive markets are restaurants, cereals, clothing and shoes. Characteristics of monopolistic competitive markets: - There are many producers and many consumers in a given 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. - Producers have a degree of control over price. Perfect competition describes the perfect being a market in which there are many small firms, all producing homogeneous goods. Characteristics are: - Many buyers/Many Sellers – Many consumers with the willingness and ability to buy the product at a certain price, Many producers with the willingness and ability to supply the product at a certain price. - Low-Entry/Exit Barriers – It is relatively easy to enter or exit as a business in a perfectly competitive market. - Homogeneous Products – The characteristics of any given market good or service do not vary across suppliers. So the main difference is that the product is homogeneous (the same) in perfectly competitive markets and hetrogeneous (slightly different) in monopolistic competitive markets. Also, individual firms have a degree of control over the price in monopolistic competitive markets, but they do not in competitive markets.
What are the difference between perfect competition and monopolistic competition?
PERFECT COMPETITION: where there are many producers and no one can influence the price, the goods are all the same and branding cannot be applied to it, the firms aim at minimizing costs rather than maximizing profits. MONOPOLISTIC COMPETITION: is where there are few producers but all produce a different good and are able to have their own niches, they are able to differentiate themselves from other producers by making people brand conscious and using advertising as a powerful tool. OR IN DETAIL REFER THIS ONE Monopolistic Competition A type of competition within an industry where: 1. All firms produce similar yet not perfectly substitutable products. 2. All firms are able to enter the industry if the profits are attractive. 3. All firms are profit maximizers. 4. All firms have some market power, which means none are price takers. Monopolistic competition differs from perfect competition in that production does not take place at the lowest possible cost. Because of this, firms are left with excess production capacity. This market concept was developed by Chamberlain (USA) and Robinson (Great Britain). Perfect Competition A market structure in which the following five criteria are met: 1. All firms sell an identical product. 2. All firms are price takers. 3. All firms have a relatively small market share. 4. Buyers know the nature of the product being sold and the prices charged by each firm. 5. The industry is characterized by freedom of entry and exit. Sometimes referred to as "pure competition". Perfect competition is a theoretical market structure. It is primarily used as a benchmark against which other market structures are compared. The industry that best reflects perfect competition in real life is the agricultural industry.
Under monopolistic competition, why does a firm enjoy monopoly power but not monopoly profits?
Monopoly market is a condition attributed to factors attributed by production side. Governance , business drive, capital flow, raw material etc are making the ease of production environment. It can be a monopoly when driven by liscence policies or capacity constraints.. Profit is outcome of multiple factors-Primarily customers, products economic demand and growing market size.Hence monopoly is supply part and profit is demand part. So these are not interlinked fully.
Why is society worse off under monopoly than under perfect competition?
Well since you mentioned the atc curve you have to draw it out. : P If you draw the monopoly cost curves you will see that the monopoly produces some deadweight loss compared to a perfect competition. A monopoly is inefficient to the way they use resources ( higher price for less output compared to perfect competition.) http://www.rh.edu/~stodder/BE/MonopA1.gi... The red and blue lines are where a perfect competition would normally produce at (Marginal cost and demand curves since MC = MR = P) but in a monopoly (MC = MR < P ) the price is set at where marginal revenue and marginal cost is set. In the long run the ATC curve will be minimized at where the demand and MC curves are. So a monopoly would be earning excess profit while a perfect competition firm would be earning zero economic profit.