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:
“Milton’s the prince of poets—so we say;
A little heavy, but no less divine:
An independent being in his day—”
—George Gordon Noel Byron (1788–1824)
“Once the decision has been reached, close your ears even to the best counter-argument: a sign of strong character. Thus an occasional will to stupidity.”
—Friedrich Nietzsche (1844–1900)
“So near along life’s stream are the fountains of innocence and youth making fertile its sandy margin; and the voyageur will do well to replenish his vessels often at these uncontaminated sources.”
—Henry David Thoreau (1817–1862)