This document discusses monopolistic competition. It begins by defining monopolistic competition as a market structure between perfect competition and monopoly, with many firms of varying sizes selling differentiated but substitutable products. It notes firms have some control over price but cannot influence the market as a whole. Examples of fast food chains are given. Advantages like variety, quality incentives and easy entry are outlined. Monopolistic competition is then compared to monopoly and oligopoly based on number of firms and products, barriers to entry, innovation, and market control. Graphs of short and long-run firm behavior are included. The document concludes by thanking the audience.

1. Ngô Chí Trung (1258085)
Nguyễn Phan Đăng (1558009)
Võ Tùng Thiên Ân (1268001)
Huỳnh Thanh Nguyên (1258042)
Ngô Thị Xuân Uyên (1258092)
Trần Hồng Đào (1258010)
Class: 12BSM2
Course: Microeconomics

2. Monopolistic
Competition

3. What is Monopolistic
Competition?
 A market structure
between the extremes of
perfect competition and
monopoly
 Many firms
 Some large firms, some
small firms
 No single firm control the
market

4. What is Monopolistic
Competition?
 Product are differentiation
 Consumers buy based on
loyalty rather than quality
 No product are perfect
substitutes

5. Example:

6. Advantages of Monopolistic Competition
1. The Promotion of Competition (lack of Barriers to
Entry)
2. Differentiation brings greater consumer choice and
variety
3 . Product and service quality – development
4. Consumer become more knowledgeable of Products

7. Compare Monopolistic Competition with Monopoly
Monopolistic Competition Monopoly
Many products One product
Few barriers to entry No chance of entry
Forced Innovation No innovation
No market control Absolute market
control

8. Compare Monopolistic Competition with Monopoly
Monopolistic Competition Oligopoly
Many products Few products
Few barriers to entry High barriers of entry
Forced Innovation Little innovation
No market control Large market control

9. Figure
Short-run

10. Long-run

12. Many firms
Jollibee, KFC, Lotteria, Burger King, Popeyes, Texas
Chicken.

14. •Product differentiation
The same basic functions: Fast food (chicken, hamburger,
french fries.

15. Differences in qualities such as type, style, quality,
reputation, appearance, and location that tend to
distinguish them from each other.

17. Easy entry and exit
•Less capital than railway,
airport, oil …
•No barriers to entry or exit.
•Firm unable to cover its
costs can leave the market
without incurring liquidation
costs

18. Market power
Price maker

19. Market power
Price maker:
the process of
creating real or
apparent differences
between goods and
services

21. Thank for your
attention