1. Monopolistic Competition
Many firms compete in a market to sell products that are similar but not identical.
Four conditions of Monopolistic Competition:
Many firms
Few barriers to entry
Small control over price
Different products

2. Non-Price Competition
Defined as a way to attract customers through style, service, or location, but not a lower price.
Physical characteristics
- simplest way to distinguish your products
Location
Service level
Advertising/Image

3. Examples of Monopolistic Competition
Retail stores
restaurants
Gas stations

4. Oligopoly Term is derived from two Greek terms: “oligi “= few
“polien” = sellers
Defined as a market structure dominated by a few large firms selling similar or different products.

5. Features of Oligopoly Few firms
each firm controls a large portion of the market
severe competition
Interdependence
Actions of one may affect rival firms
Non-price competition
advertising and service
4) Barriers to Entry
high due to government regulations (licenses/patents)
high start-up costs

6. Best Examples of Oligopolies
Operating systems: Apple and Microsoft
Soft drink companies: Coke and Pepsi
National mass media: NBC, CBS, ABC
Airline Industry: Boeing and Airbus

7. Monopoly Defined as a market dominated by a single seller.
A firm is considered a monopoly if…………
The sole seller of a product
Its product does not have close
substitutes

8. Monopoly What cause monopolies to exist??????
Fundamental problem is barriers to entry
Barriers to entry have three sources:
Ownership of a key resource
Government gives a single firm the exclusive rights to production
Costs of production make a single producer more efficient

9. Natural Monopolies
Market that runs most efficiently when one large firm provides all of the output.
High barriers to entry
Government allows the monopoly to form and then regulates it
Examples…….
Public Utilities (water, electricity, natural gas)

10. Government Monopolies
Government allows or creates a monopoly within a market. How??????? By issuing patents, franchises and licensing agreements. Patent: license that gives an inventor the exclusive right to sell a product for a certain period of time (Ex: pharmaceutical industry) Franchise: right to sell a good or service within a exclusive market (Ex: pro sports teams) License: government issued right to operate a business (Ex: radio stations)