Most firms interact in markets with other firms who produce similar products but not identical products to their own products. In this paper, you will discuss the decisions your firm should make and the strategies your firm should employ in such situations. You will examine real-world situations in which your firm participates and the decisions and strategies that are used and relate them to the material you have studied in Chapter 16.
Activity Instructions
For the particular firm/business you selected (see note below), describe the markets in which your firm participates that are monopolistically competitive. Consider the possibility of inputs to the firm as well as your chosen firm’s output. Besides your descriptive analysis, answer the following questions:
What differences are there between the monopolistically competitive firm’s product and other firms’ output?
What causes those differences?
Are there actions that the monopolistically competitive firm is taking to differentiate its products from other firms’ products in that market? Are those actions effective?
What are the goals of those particular actions (i.e., how does it affect the situation the firm is facing)?
How and why are consumers’ behaviors affected?
Are there other actions that the firm could use to differentiate its product from the products of other firms?
Do you think these actions would be effective? Why or why not?
Note: Most firms chosen by students have some aspects of Monopolistic Competition in their output markets. For this week’s paper, focus on those aspects. However, it is possible the firm you originally chose in Week 1 is not a participant in any monopolistically competitive markets. In that case, you may choose another firm to discuss this week. If you are in this situation, please consult with the instructor.
Writing and Submission Requirements
1.5 – 2 pages (approx. 300 words per page), not including title page or references page
Double-spaced, 1″ margins, 12 pt. Times New Roman, APA style