Shared Flashcard Set

Details

Chapter 16
Monopolistic Competition
5
Economics
Undergraduate 2
11/01/2011

Additional Economics Flashcards

 


 

Cards

Term
Monopolistic Competition
Definition
A market structure in which many firms sell products that are similar but not identical.
Term
The Product-Variety Externality
Definition
Entry of a new firm provides new products and new consumer surplus, conveying a positive externality.
Term
The Business-Stealing Externality
Definition
Entry of new firm takes customers and profit away from existing firms, conveying a negative externality.
Term
Critique of Advertising
Definition
  • Manipulates people's tastes to create desires
  • Impedes competition, brand loyalty
Term
Defense of Advertising
Definition
  • Provide information to customers
  • Fosters competition
  • Less market power for each firm
  • Easy to enter/exit
  • Policy makers agree
Supporting users have an ad free experience!