Independent Decision Making
Each MC firm independently sets the terms of exchange for its product. The firm gives no consideration to what effect its decision may have on competitors. The theory is that any action will have such a negligible effect on the overall market demand that an MC firm can act without fear of prompting heightened competition. In other words each firm feels free to set prices as if it were a monopoly rather than an oligopoly.
Read more about this topic: Monopolistic Competition
Famous quotes containing the words independent, decision and/or making:
“So far as I am individually concerned, & independent of my pocket, it is my earnest desire to write those sort of books which are said to “fail.””
—Herman Melville (1819–1891)
“There are many things children accept as “grown-up things” over when they have no control and for which they have no responsibility—for instance, weddings, having babies, buying houses, and driving cars. Parents who are separating really need to help their children put divorce on that grown-up list, so that children do not see themselves as the cause of their parents’ decision to live apart.”
—Fred Rogers (20th century)
“Good breeding and good nature do incline us rather to help and raise people up to ourselves, than to mortify and depress them, and, in truth, our own private interest concurs in it, as it is making ourselves so many friends, instead of so many enemies.”
—Philip Dormer Stanhope, 4th Earl Chesterfield (1694–1773)