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NORMATIVE ECONOMICS: The branch of economics that states the way the economy should operate. A normative statement is based on values and can be proved neither right or wrong. While positive economics seeks to explain the way it is, normative economics, the policy side of economics, seeks to prescribe the way it should be. Normative economics is used to recommend ways to change the world, to improve it, and to make it a better place for both man and beast.
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MONOPOLISTIC COMPETITION: A market structure characterized by a large number of small firms, similar but not identical products sold by all firms, relative freedom of entry into and exit out of the industry, and extensive knowledge of prices and technology. This is one of four basic market structures. The other three are perfect competition, monopoly, and oligopoly. Monopolistic competition approximates most of the characteristics of perfect competition, but falls short of reaching the ideal benchmark that is perfect competition. In fact, the best way to think of monopolistic competition is our imperfect real world's best approximation of perfect competition. It aspires to perfect competition, but doesn't quite make it. See also | market structure | perfect competition | oligopoly | monopoly | market control | price maker | marginal cost | demand curve | market failure | monopolistic competition characteristics | monopolistic competition and demand | monopolistic competition and efficiency | inefficiency | product differentiation | competition among the many |
Recommended Citation:MONOPOLISTIC COMPETITION, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: December 8, 2025].
AmosWEB Encyclonomic WEB*pedia:Additional information on this term can be found at: WEB*pedia: monopolistic competition
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PERFECT COMPETITION, MARGINAL ANALYSIS A perfectly competitive firm produces the profit-maximizing quantity of output that equates marginal revenue and marginal cost. This marginal approach is one of three methods that used to determine the profit-maximizing quantity of output. The other two methods involve the direct analysis of economic profit or a comparison of total revenue and total cost.
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RED AGGRESSERINE
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Today, you are likely to spend a great deal of time surfing the Internet hoping to buy either a handcrafted bird house or a weathervane with a chicken on top. Be on the lookout for celebrities who speak directly to you through your television.
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Okun's Law posits that the unemployment rate increases by 1% for every 2% gap between real GDP and full-employment real GDP.
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"If you don't know where you are going, any road will get you there." -- Lewis Carroll, writer
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P&L
Profit and Loss
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