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Do you agree?   Perfect competition, supply and demand dictate the price for the entire industry and prices consistent across the industry when selling similar products

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Do you agree?

 

Perfect competition, supply and demand dictate the price for the entire industry and prices consistent across the industry when selling similar products.

 

Monopolistic Competition market structure has many sellers selling similar/ close substitute goods to buyers/consumers. You will find with monopolistic competition there is no price competition. The companies set pricing and are able to control the decisions surrounding the pricing and the amount produced. 

 

Perfect competition is standardized whereas monopolistic competition is differentiated by brand. 

 

Although I think there is still debate, I find Microsoft an example of monopolistic competition. It is differentiated by brand, and it's a brand the is connected to almost every computer in the industry, from personal to corporate. They can control the price. We have some flexibility on the packages we can buy, but ultimately there is little competition until Google. (MS Office 365/Google Web & Workspace)

 

With perfect competition easier to enter and exit there are more options out there for me to choose from even when shopping at a grocery story. Going back to last week, when I discussed my Diet Pop addiction. Several companies manufacture pop so I have options, may not be my top choice but the sales will help me decide. I notice perfect competition does seem to keep the costs in range. (12 pack of Diet Coke $6.99, Diet Dr Pepper is $6.69) If the industry is raising the costs you will see higher costs across all the brands, but the sales are where you can save.