Monopolistic Competition Essay
MP3 players have dominated the market in a huge way and companies would be ready to pay a handsome amount for some off the basket innovation that would lead their company all the way the top. Any company producing MP3 players faces one of the tightest competitions in the market.
In a monopolistic competitive market the product of different sellers are discerned on the basis of brands. Here the …show more content…
The firms in monopolistically competitive industries might not earn economic profits in long runs; because economic profits attract competitors whose presence might eliminate profits here. In the long run firms in the monopolistic competition could not attain allocates efficiency because they are not operating where price equals marginal cost. Since the product is differentiated, there exists brands like Apple, Sony, Creative, SanDisk, because of their brand name and reputation they hold, these firms have some brand loyalty and the firm have some control over the price.
These branded companies had invested huge amount of money for the advertisement of their product because these advertisement of