Subject: Business Economics
“In the monopolistic competition, a few firms sell differentiated products” Explain this statement by highlighting important features of this kind of a market. Substantiate your answer by a live example. Also explain how the equilibrium in this kind of a market is different from a long run equilibrium under perfect competition.
Complete the hypothetical table below and explain in brief, the behaviour of each type of cost.
- a) What are the practical uses of the concept of price elasticity of demand for different stakeholders in the production process?
- b) Distinguish between the shift and movement in the demand curve. Explain any five factors which would bring about a shift in the demand curve for Maggie noodles.