1
Q
characteristics of monopolistic competition(3+eg)
A
a) Large number of independent firms
b) Slightly differentiated products with close substitutes
c) Free Entry & Exit
Real-life egs: are small independent restaurants, fashion boutiques, grocery stores, hawker food stalls, small barber shops, car repair garages & independent private clinics, etc.
2
Q
free entry and exit leads to
A
compete away abnormal profit
cant have abnormal profit in long term.
when losses, free exit till normal profit is made
3
Q
in the short run, 3 types of profit
A
normal
abnormal
subnormal
hl econs
flashcards
Decks in class (22)
# Cards
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2.1 markets-demand32
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2.2 market-supply18
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2.3 competitive market equilibrium14
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2.8 market failure & externalities of production39
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2.8 common pool resources12
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2.11a market failure - market power11
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2.11b profit maximisation16
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2.11e3
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1.1 (idk)21
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1.1 ppc+circular flow of income36
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1.2 how economists approach the world//????20
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2.4 critique of the maximising behaviour of consumers and producers16
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2.5 elasticities of demand42
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2.6 elasticity of suppyl15
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2.7 role of govt. in micro69
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3.1 measuring economic activity and illustrating its variations44
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3.2 AD16
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2.9 market failure - public goods17
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2.10 market failure - asymmetrical information (HL)16
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3.3c unemployment21
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3.2 AS6
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3.3d the government (national) debt12
