Answer to Question #304591 in Microeconomics for Axis

Question

600 words total Please

1. By giving examples describe what happens when we have a lack of competition in a monopolistic market?

2. By giving examples describe what happens when there is a lack of substitutes in a monopolistic market?

Answer 1

1)

• Producer will have full control of prices.
• No need for advertising.
• No differentiation of products.
• Consumers will have constrained choice.

2)

• Prices will be rigid.
• High competition.
• Great advertising.