Monopolistic

• Characteristics?

  Large number of relatively small firms

  Very low barriers to entry

  Short run supernormal profits only

  Product differentiation exists

  eg airlines
• how do monopolistic markets operate?

  Firms are price makers in the short run due to uniqueness

  Earn supernormal profits in shortrun

  Low barriers to entry or exit

  Firms replicate uniqueness of price takers in long run