Monopolistically Competitive Markets:
The Power of Successful Product Differentiation
Competitive and Monopolistic Aspects
Many different brands Product differentiation
Marketing/Advertising
The power of brand name
Competitive and Monopolistic Aspects
$5.99
$3.99
Generic-brand “aspirin”
Advertising Expenditures (% of 2007 US Sales)Estee Lauder 30 L’Oreal 27
Schering-Plough 24
Mastercard 24
Reckitt Bensicker 20Clorox 17
Molson 14
Campbell Soup 12
Successful Marketing and Advertising
Price
Quantity
Demand 1
Demand 2
Average Cost 1
Average Cost 1
Unsuccessful Marketing and Advertising
Price
Quantity
Demand
Demand 2
Average Cost 1
Average Cost 2