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Applied Economics Q3 Module 14
Applied Economics Q3 Module 14
HIGH
Economics SCHOOL
Self-Learning
Module
Market Structure: 14
Monopolistic Competition
666
Quarter 3
Applied Economics
Quarter 3 – Self-Learning Module 14: Market Structure: Monopolistic Competition
First Edition, 2020
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Self-Learning
Module
14
Quarter 3
Market Structure:
Monopolistic Competition
Introductory Message
In addition to the material in the main text, you will also see this box in the
body of the module:
As a facilitator you are expected to orient the learners on how to use this
module. You also need to keep track of the learners' progress while allowing them
to manage their own learning. Moreover, you are expected to encourage and assist
the learners as they do the tasks included in the module.
For the learner:
This module was designed to provide you with fun and meaningful
opportunities for guided and independent learning at your own pace and time. You
will be enabled to process the contents of the learning material while being an
active learner.
Posttest - This measures how much you have learned from the
entire module.
EXPECTATIONS
PRETEST
Directions: Read each statement carefully. Choose the letter of the best answer and
write it on a separate sheet of paper.
A. Seller
B. Buyer
C. Market demand and supply
D. None of the above
5. The price maker in the monopolistic competition.
A. Seller
B. Buyer
C. Market demand and supply
D. None of the above
RECAP
Monopolistic Competition
Monopolistic competition is characterized as an industry in which many
firms offer products or services that are similar, but not exactly alike –
differentiated in nature. As consumers, we want to have varieties of products to
choose from. We have the choice to buy the product in terms of the quality,
features, packaging, and even because of its brand name.
2. The firms sell differentiated products which are highly substitutable but are not
perfect substitutes. Products are not identical, but very similar, so companies use
product differentiation. Let say, shampoo products, there are many variants of
shampoo to choose from like for hair straightening, anti-dandruff, smooth and silky
hair. Product differentiation is a marketing strategy that strives to distinguish a
company's products or services from the competition (Kopp, 2020). The product
differentiation may be in color, packaging, store location, store design, store
decorations, delivery, service, or anything to make the product stand out. Brand
identity is one of the selling point of the firms in a monopolistic competition.
3. There are free entry and exit in the market that enables the existence of many
sellers.
4. The firms are engaged in non-price competition. This involves the advertising of
a product’s appearance, quality, or design which takes to shift the demand curve to
the right without sacrificing the prices.
5. It is similar to a monopoly in which the firm can determine the quantity of the
products and has some price control.
ACTIVITIES
To summarize what you have learned in the lesson, answer the following
questions:
VALUING
Reflect on this!
“Your most unhappy customers are your greatest source of learning” – Bill Gates
POSTTEST
References
About Ashley Sefferman Ashley Sefferman Is Head of Content at Apptentive. A
Digital Communication and Content Strategy Enthusiast. "16 Product
Management Quotes to Leave You Inspired." Apptentive. March 19, 2020.
Accessed July 28, 2020.https://www.apptentive.com/blog/2018/10/11/16-
product-management-quotes/.
Dinio, R. and Villalis, G. Applied Economics. Rex Book Store, Inc. Sampaloc,
Manila, 2017.
Kenton, Will. "Imperfect Market: An Inside Look." Investopedia. February 05, 2020.
Accessed July 28, 2020.
https://www.investopedia.com/terms/i/imperfectmarket.asp#:~:text=An
imperfect market is one,or exit in the market.