Imperfect Competition

Question	Answer
Firms in imperfect competition are not quite price takers because... (2)	1. There are still some barriers to entry 2. There is some product differentiation
What are some examples of imperfect competition? (2)	Oligopoly: few sellers, offering similar/identical products (Supermarkets/Banks) Monopolistic Competition: Many firms selling products that are similar but not identical (Films/Cafes)
What are the characteristics of monopolistic competition? (3)	1. Differentiated products 2. Many sellers 3. Low barriers to entry This means zero profits in the long-run.
What differs between perfect competition and monopolistic competition regarding economic efficiency?	In the long-run perfect competition can be economically efficient but monopolistic competition will never be economically efficient.

Resource summary

	Created by Sophia Lynch over 4 years ago