Monday, April 16, 2012

Exercise 7-1: Defining Monopolistic Competition

Size:
Small Company
Medium Company
Large Company
Features:
Differentiated products
Brewster's - With a few locations in Alberta and Saskatchewan and specialized on brewing own beer
Boston Pizza - Franchises all over Canada and some in the US, specialized in Pizza, but offering a variety of dishes.
McDonald's - Franchises all over the world and market leader when it comes to Hamburgers.
Control over price
Edelweiss store - Grocery and gifts store with imported goods from Germany
Pawn Shops - Can be various stores with the same owner and have control over the price
Rolex - High end watches
Mass advertising
Kokanee - Western Canadian Beer brand with TV and newspaper ads
President's Choice - Medium company with advertisement in newspaper, TV, flyer's
Scotiabank - every possible way of advertisement: in-store, TV, Radio, Newspaper, Internet, Billboards, Hockey arenas...
Brand name goods
No Name - Superstore house brand with little advertisement other than Superstore trucks, flyer's and in-store
Easton - Recognized hockey brand
Coca Cola - world wide leader when it comes to Pop




The main characteristics of a Monopolistic Competition are that there are many companies that are relatively small to the size of the market and therefore have small market shares. No special entry or exit requirements exist for new companies and while they all offer similar products, they try to differentiate from each other and advertise to inform the buyers on why product A is better than product B.

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