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Non-price competition typically involves promotional expenditures (such as advertising, selling staff, the locations convenience, sales promotions, coupons, special orders, or free gifts), marketing research, new product development, and brand management costs.
What firms usually have the least amount of choices about what they do? Firms engaged in monopolistic competition will also engage in nonprice competition. Nonprice competition is when firms try to attract customers through style, service, or location and not with lower prices.
The perfectly competitive firm is a price taker, so this price is the firm’s marginal revenue curve, P = MR = d, in the right diagram. This price also corresponds to minimum long-run average total cost to ensure zero economic profit in the long run.
Routledge. BANKING INDUSTRY IS NO LONGER MONOPOLISTIC COMPETITION 13 In the long run, the banks still produces their services and products where the Marginal Revenue and Marginal cost are equal. However, the AR curve which is also the demand shifts as other firms enter the market and increase competition.
The basic structure of banking markets is characterized by the coexistence of a few, large dominant banks — defined as those who jointly control over half of the deposits in a given metropolitan market — with a number of smaller, local banks which constitute a fringe.
NIKE is monopolistically competitive because there are many other firms is the market such as Puma, New Balance, Adidas, and more. The biggest factor in NIKE being a monopolistic competition is product differenti- ation.
It said banking is now an oligopoly, and therefore switching banks will not work because banks are not in a competitive market. “Banking is not really a competitive industry. In reality, it’s more like an oligopoly — a scenario in which an industry is controlled by a small number of firms.”
Nowadays in many countries, the banking sector is clearly an oligopoly in the sense that it consists of a few large banks who control a significant proportion of the banking business across the country.
The UK banking sector is dominated by a few very large banks, including the Lloyds Group, Barclays, the Royal Bank of Scotland (RBS), and HSBC. In term of market shares for all categories of business, the market is clearly oligopolistic.