1. CHARACTERISTICS
   1. LOW CONCENTRATION
      1. MANY
         1. small market shares each
         2. no collusions
   2. LOW BARRIER
      1. does not require high investment
   3. Type of products
      1. DIFFERENTIATED
         1. similar, but NOT HOMOGENOUS
         2. downward sloping
      2. non-price competition
         1. quality
         2. advertising
         3. packaging
   4. eg
      1. Clothing stores
      2. Restaurants
2. Short run profit maximisation
   1. determined when MR = MC
   2. hence P > MC
   3. PRICE INTERACTION
      1. A
         1. MR = MC
      2. B.
         1. Quantity on D curve
   4. not at the minimum point of its ATC
3. Long run equilibrium
   1. DC to the left
      1. if a firm earn profits
      2. new firms enter the M
      3. reduce selling price
   2. general
      1. in long run, D = ATC
      2. disappear of economic profits in the long run
   3. B - ZERO PROFIT
      1. outcomes
         1. QUIT the M
         2. DIFFERENTIATE PRODUCES
            1. change packages
            2. marketing
            3. persuade customers
            4. DC shifts to the right
            5. win customers back
            6. increase P
            7. maintain profitability in the long run
         3. lower the cost of producing
4. Assessment
   1. P > MC
      1. NOT min ATC
   2. excess capacity
      1. ATC = MC to ATC = demand curve
   3. EFFICIENCY
      1. allocative
      2. productive
      3. more dynamic efficiency
      4. INEFFICIENT
   4. CONSUMER GAINS
      1. able to purchase differentiated products
         1. more closely suited to their tastes
   5. PERFECT COMPEPETITION
      1. D horizontal = MR
5. Product Differentiation
   1. MARKETING
      1. APPEAL their products to consumers
      2. superficial change rather than real
   2. BRAND MANAGEMENT
      1. MAINTAIN the differentiation of a product over time
   3. PRODUCT DEVELOPMENT
      1. innovation