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Module Six Short Paper

The document discusses monopolistic competition and monopolies, highlighting their similarities and differences, such as price-setting and market entry. It provides examples of Avista as a monopoly and McDonald's as a company in monopolistic competition. The paper emphasizes the unique characteristics of each market structure and their implications for consumers.

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cmixon1237
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40 views4 pages

Module Six Short Paper

The document discusses monopolistic competition and monopolies, highlighting their similarities and differences, such as price-setting and market entry. It provides examples of Avista as a monopoly and McDonald's as a company in monopolistic competition. The paper emphasizes the unique characteristics of each market structure and their implications for consumers.

Uploaded by

cmixon1237
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Module Six Short Paper: Monopolies and Monopolistic Competition

Crystal Mixon

Southern New Hampshire University

ECO 201: Microeconomics

Professor Prudhont

June 16, 2025


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Introduction

Monopolistic competition is a market structure in which companies compete against each

other by offering products or services that are only slightly different. As a result, no single

product or service dominates the market (Team, 2025). A monopolistic market structure is a

theoretical condition that describes a market where only one company may offer products and

services to the public (Banton, 2024).

Economic Theory

Three key features that are the same between monopolistic competition and monopolies

are (1) they are both price makers where they set their own prices due to being the only maker of

their product/service, (2) both markets face a downward-sloping demand curve, and (3) both

monopolistic competition and monopolies aim for maximizing their profits. Three key features

that are different between a monopolistic competition and monopolies are (1) number of firms,

(2) the items/services they sell, and (3) being able to enter and exit into a monopoly/monopolistic

competition.

Application

Avista is an example of a monopoly. I chose Avista because they are a monopoly for two

services, electricity and gas. Avista can lower and raise the prices for both services, and we have

no other alternatives. An example of a monopolistic competition is McDonald’s. I chose this

company because they are the most known around the world with multiple locations in multiple
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countries. McDonald’s has alternatives like Wendy’s and Burger King. They all make different

types of burgers and use different ingredients from different suppliers.


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References

Banton, C. (n.d.). Monopolistic markets: Characteristics, history, and effects. Investopedia.

https://www.investopedia.com/terms/m/monopolymarket.asp#:~:text=What%20Is%20a

%20Monopolistic%20Market,infinite%20number%20of%20firms%20operate.

GeeksforGeeks. (2025, April 7). Difference between monopoly and monopolistic competition.

https://www.geeksforgeeks.org/difference-between-monopoly-and-monopolistic-

competition/

Mankiw, N.G. (2024). Principles of economics (10th edition). Cengage.

Team, T. I. (n.d.). Monopolistic competition: Definition, how it works, Pros and Cons.

Investopedia. https://www.investopedia.com/terms/m/monopolisticmarket.asp

What are the characteristics of monopolistic competition?. buildd. (n.d.).

https://buildd.co/marketing/what-are-the-characteristics-of-monopolistic-competition

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