Monopoly competition is a common feature of the old economy, which is more obvious in the new economy (also known as knowledge economy) era.
Monopoly competition is one of the typical market forms in economics.
Enterprises engaged in monopolistic competition are monopolized in the short term, but they have zero profits and overproduction in the long term.
It is worth noting that although monopoly competition has always been the topic of studying market and competition in microeconomics, it has been used by macroeconomists more and more, especially after 1970' s, this kind of research focuses on the modeling trend of micro-foundation.
Extended data
Conditions for monopolistic competition:
1, many manufacturers
There are many manufacturers in the market, and each manufacturer has to accept the market price to a certain extent, but each manufacturer can exert a certain degree of influence on the market and does not fully accept the market price. In addition, manufacturers cannot collude with each other to control the market. For consumers, the situation is similar. In this way, the economic man who monopolizes the competitive market is the influencer of the market price.
Step 2 be interdependent
Every agent in the market thinks that he can act independently of each other and not depend on each other. One person's decision has little influence on others and is not easy to be detected. You can ignore other people's confrontational behavior.
3. Product differences
The products of different manufacturers in the same industry are different from each other, regardless of quality, function and immateriality (such as packaging, trademarks, advertisements, etc.). ) or in terms of sales conditions (such as different geographical location, service attitude and methods, which make consumers prefer this product to that).
Step 4 be accessible
It is easier for manufacturers to enter and leave an industry. This is similar to perfect competition. The scale of manufacturers is not very large, and the funds needed are not too much. It is easy to enter and exit an industry, and there are few obstacles.
5. Product groups can be formed.
Multiple productgroup can be formed in the industry, that is, manufacturers producing similar goods in the industry can form groups, and the product differences between these groups are large, while the product differences within the group are small.