1. Monopolistic Competition I.The world of market structures A. Pure competition B. Monopoly C. Oligopoly (few firms) D. Monopolistic competition, which is Def: “ A market structure characterized by many sellers, differentiated products, and low to no barriers to entry.”

2. Monopolistic Competition II.Examples of monopolistic competition III.The firm’s demand curve A. The monopolistic competitor assumes that rivals won’t change their prices. Reasons: B. Implications for the demand curve C. Marginal revenue D. How does this differ from monopoly?

3. Monopolistic Competition IV.Profit maximization in the short run V.Profit maximization in the long run A. Tangency outcome: reasons 1. Entry 2. Shortsighted competition B. Tangency outcome: results 1. P > MC 2. “Excess” capacity 3. But: greater product variety!