Author Question: One of the assumptions of monopolistic competition is that firms produce differentiated products. ... (Read 357 times)

amal · **on:** Jun 29, 2018

One of the assumptions of monopolistic competition is that firms produce differentiated products. What does this assumption imply about the demand curve facing a representative firm?

What will be an ideal response?

Question 2

Peet's Coffee and Teas produces some flavorful varieties of Peet's brand coffee. Is Peet's a monopoly?

A) No, Peet's is not a monopoly because there are many branches of Peet's.
B) Yes, Peet's is the only supplier of Peet's coffee in a market where there are high barriers to entry.
C) Yes, there are no substitutes to Peet's coffee.
D) No, although Peet's coffee is a unique product, there are many different brands of coffee that are very close substitutes.

Kjones0604 · **Reply #1 on:** Jun 29, 2018

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