In this week’s materials, there are highlights that emerge. Monopolistic competition is characterized by many producers not fixated on price but rather on the products, attempting to differentiate them from those sold by their rivals. Companies that participate in this kind of market use most of their resources crafting their products so that they are unique and appealing to the consumers. In this endeavor, advertising is fundamental in informing the consumers of the unique qualities their products possess over those of their competitors.
In a monopoly, however, the producer does not face any competition and focuses on maximizing profits. This means that the producer can quote the price he feels like as well as the quantity he produces.
U.S. colleges and universities can be seen as "firms" in a monopolistically competitive industry. Each produces a similar product (education), but the products are not identical. A college can raise price (tuition) without losing all of its students. The product differs by location (students tend to attend colleges relatively close to home), extent of services (prestige, good sports teams, partying, contacts), quality, and image (Harvard's image differs from UCLA's).
As "firms", are U.S. colleges and universities, Post for example, monopolistically competitive or a monopoly? How about compared to Yale? If you were President of Post University, how would you “increase sales”?
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