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RETURNS TO SCALE: Changes in production the occurs when all resources are proportionately increased in the long run. Returns to scale answers the question: If labor, capital, and ALL other inputs increase by 10%, does output increase by more than 10%, less than 10%, or exactly 10%? These answers indicate that returns to scale can take one of three forms: increasing returns to scale, decreasing returns to scale, and constant returns to scale.
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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: July 5, 2025].
AmosWEB Encyclonomic WEB*pedia:Additional information on this term can be found at: WEB*pedia: monopolistic competition
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ELASTICITY AND SUPPLY INTERCEPT The intersection of a straight-line supply curve with vertical price axis and/or horizontal quantity axis reveals the relative price elasticity of supply. Intersection with the horizontal quantity axis means inelastic and intersection with the vertical price axis means elastic. Intersection with the origin means unit elastic supply.
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Two and a half gallons of oil are needed to produce one automobile tire.
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"Plans are only good intentions unless they immediately degenerate into hard work." -- Peter Drucker, management consultant
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AS
Aggregate Supply
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