Monopolistic Competition

Monopolistic Competition is a type of market structure that includes retail, service and some manufacturing markets.  A monopolistic industry has four characteristics:
1. Many buyers and sellers
2. No significant barriers to entry
3. Profit maximizers
4. Similar but not absolutely identical

As more producers or firms enter the market the demand curve decreases.  Once the demand curve reaches the point of tangency with the average total cost curve it can only break even.  If the demand curve shifts below the average total cost curve the firm will then generate at a loss.  This when the market is no longer profitable.

This table demonstrates the different types of products and services that exist within a monopoly categorized by the four characteristics.

Size:	Small Company	Medium Company	Large Company
Differentiated Product:	SEARS	Microsoft	Nike
Control Over Price:	Calaway Park	Ciniplex Odion	Dollarama
Mass Advertising:	CJAY 92	Superstore	Dodge
Brand Name goods:	SAIT Polytechnic	PetroCanada	McDonalds