1. What are the major distinctions between a monopolistically competitive industry and an oligopolistic industry?
2. What is the difference between a price taker and a price setter? Which do you think a firm would prefer to be? Why?
3. In the model of monopolistic competition, we say that there is product differentiation. What does this mean, and how does it differ from the assumption of homogeneous goods in perfect competition?
4. In the following list of goods and services, determine whether the item is produced under conditions of monopolistic competition or of oligopoly.
soft drinks
exercise drinks
office supply stores
massage therapists
accountants
colleges and universities
astrologists