!
&&
'
'
(
)
'
*
*
$
$
*
,
+
*
%
-%%
$
!
*
%
'
%
%
.-/&
/&
'
+
)
)
0
%
&&
!
+
%
24-5
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
D
MR
Monopolistic competitor
D
MR
/
1
2
'
!!
!
%
!
!
%
!
'
'
!
'
'
Product
differentiation
reduces the price
elasticity
of
demand, which
appears as a
steeper demand
steeper demand
curve. Successful
product
2
2
!
3
%
4
!
5
+
77
/
8
%
$
!
+
+
1
1
%
!!
1
1
/
%
• It still competes with other firms offering
• It still competes with other firms offering
/
2
'
$
$
*
'
$
'
$
$
$
/
/
7
/
/
7
99
n it ) Initial market supplyEffect of entry on the industry
n
it
)
Effect of entry on the
monopolistically competitive firm
Later market supply Reduced market share p P ri ce ( p e r u n
Quantity (units per time period) Market demand P ri ce ( p e r u n
