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Effects Of Monopolistic Competition

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This chapter it’s all about the monopoly or cartel, four-firm monopolistic competition, eight firm monopolistic competition and perfect competition. They have also trade restrictions could take the form of tariff, import quotas or buy national procurement policies; investment restrictions could keep foreign firm from opening or expanding their industrial and distribution outlets. When the government dismantles its trade and investment restrictions, foreign competition can help make the market structure more competitive. The United States using a measuring the cost of protection because of the domestic good and imported goods, they supply schedule of the imported goods is completely elastic while the domestic good is upward sloped they are …show more content…

Recall the firms in the industry will price on a more competitive basis if they fear the eminent entry of new firm who smell the scent of very generous profits. And it is a possible has a change to calculate the welfare effects of transforming a monopolistically competitive market. The welfare effects may be calculated using the equations. The domestic elasticity parameters add have been increased in absolute value to ensure the positive solution in the cases where the starting market structure is monopoly or monopolistic …show more content…

They have a different formula that be used by solving problems in the situations. In the Philippines we have GATT (GENERAL/AGREEMENT ON TARIFF AND TRADE) means with payment on trade both export and import while NON- TARIFF is no hindrance in investment example paying the tax if you gonna export of product. There’s no quota even when it entry and they have a laws that no piracy. Import liberazation there’s no limit for entry the product because they have a laws that we gonna follow like import liberazation example they are high tech but we are low tech, other country import there products but ours we export also a high tech that’s why we’re losing money. Because we didn’t think and we didn’t studies the strategies how to stand in business or investment our own products. In reality we live in a business world, whatever country it is the important is how people manage the system or theory he / she believes as a leader. For example here in the Philippines our system or principle we used is good whatever it is there is an advantage and Disadvantages if you a leader in a country just balanced the decision you make and prefer the higher advantages than the disadvantages. Most of all don’t think on your own or we can say self-interest. As a leader think for your people not yourself. GATT is good for our country but the people who manage that system abuse it, it becomes being greedy

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