AP Economics – 12/02/19

I.  Bellwork:  iLearn 67.1 Worksheet

• Copy & Label the Graph – Answer the Questions

II. Objectives:

• Determine the prices and profits in both in the short run and the long run for Monopolistic Competition
• Construct and interpret graphs for short run and the long run monopolistic competition
• Examine how changes in cost impact  monopolistic competition and why it operates at less than capacity

III.  Turn in Homework

IV. Monopolistic Competition =  “Monopoly” + ”Competition”

Monopolistic Qualities

·         Controls price of own good due to differentiated product

·         D greater than MR

·         Plenty of Advertising

·         Not efficient

Perfect Competition Qualities

·         Large number of smaller firms

·         Relatively easy entry and exit

·         Zero Economic Profit in Long-Run since firms can enter

V.   Classwork

·         Page 674 MC 1-5

·         Page 675 Tackle the Test #2

·         Extra Credit?

VI.  Homework:    4.5 Monopolistic Competition Sheet

AP Micro Economics F2019