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Monopolistic competitive firm is a price...

Monopolistic competitive firm is a price taker.

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Monopolistic competitive firm is not a price taker as it can influence the price by creatinga differentiated image of its product through heavy selling costs
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Explore conceptually related problems

Give reasons for the following statements: (i) A perfectly competitive firm is a price-taker. (ii) Product differentiation is a characteristic feature of a monopolistic competitive market. (iii) A monopolist cannot fix both the quantity that he likes to produce and the price at which he would like to sell.

Give reasons for the following statements: (i) Demand curve facing a perfectly competitive firm is a horizontal straight line. (ii) Demand curve facing a monopolistic competitive firm is a downward sloping curve. (iii) Demand curve facing a monopoly firm is less elastic than that curve facing a monopolistic competitive firm.

Knowledge Check

  • The firm in a perfectly competitive market is a price taker. This designation as a price taker is based on the assumption that ............

    A
    the firm has some, but not complete, control over its product price.
    B
    there are so many buyers and sellers in the market that any individual firm cannot affect the market.
    C
    each firm produces a homoger.eous product.
    D
    there is easy entry into or exit from the market place.

  • In perfect competition, since the firm is a price take -curve is a horizontal straight line parallel to the X-axis.

    A
    Marginal cost
    B
    Total cost
    C
    Total Revenue
    D
    Marginal Revenue

  • Monopolistic competition consitutes:

    A
    Single firm producing close subsitues
    B
    Many firms producing close substitiutes
    C
    Many firm producing differentiated substitutes
    D
    Few firms producing differentiated substitutes

    • Similar Questions

    Explore conceptually related problems

    Under monopolistic competition, a firm faces a perfectly elastic demand curve.

    Under monopolistic competition, a firm faces a perfectly elastic demand curve.

    Giving reasons, state whether the following statement are true or false: (i) A monopolist can fix both, the price of his product and the quantity to be sold at that price. (ii) Under monopolistic competition, a firm faces a perfectly elastic demand curve. (iii) A monopolist can sell any quantity he likes at a price?

    What is a price taker firm?

    What is a price taker firm?

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