Monopolistic competition

7 July 2016

An example of a firm operating in monopolistic competition is The Wendy’s Company. The market for this company is fast food (specifically, burgers). This company operates in monopolistic competition because there are lots of companies in this market (McDonald’s, Jack in the Box, Burger King, etc. ). Each company advertises virtually the same product, but certain companies produce a product that is slightly better than the products produced by other companies, so these companies have a slight advantage.

Due to this slight advantage, these companies are able to sell their products at a slightly higher price, and advertise their products as higher quality (Wendy’s commercials highlight that their burgers are more “fresh” than their competitors’ counterparts). The presence of a large number of companies indicates that there are few barriers for a new company to enter this market. An example of a firm operating in an oligopoly is Pepsi Co.

Monopolistic competition Essay Example

This company operates in an oligopoly because there are a few companies in the soft drinks market, which indicates that there are lots of barriers for a new company to enter the market. When we think of the soft drink industry, two of the names that immediately come to mind are the Coca-Cola Co. and Pepsi Co. These companies are successful and have a world-wide consumer base (due to their presence in the world-wide soft drink market), which makes it hard for newer companies to enter the industry and succeed.

An example of a company that operates in a monopoly is ESPN, the sports news company. When looking for sports news, the channel everyone turns to is ESPN. They are the only company that has a world-wide reputation for being the premier channel for news on the sports world. There are no other companies that can come close to matching ESPN’s reach or success, since this company is the only company that is solely devoted to delivering news on sports, twenty-four hours a day.

Other news channels have time segments allotted for reporting relevant sports headlines, but ESPN has airtight control in this area since sports is their only focus, and they report on all different kinds of sport (basketball, football, baseball, tennis, etc. ). Thus, there is a sort of absolute barrier to new companies that wish to enter the market of sports news.

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