The assumption of the perfectly competitive model

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Reference no: EM13837353

The assumption of the perfectly competitive model is that products sold by all retailers are completely identical. Under this assumption, as we've seen in this analysis, competition between retailers is extremely fierce.

In practice, retailers try to gain some degree of market power by differentiating themselves from one another. This might make the demand curve facing each retailer slightly less like a perfectly competitive firm and more like that of a monopoly--a market structure sometimes called "monopolistic competition." Which of the following are examples of strategies that a retailer might use to seem different from its competitors? Check all that apply.

I. Bundle Vista with other items, like peripherals or MP3 players

II. Try to offer Vista at the lowest possible price

III. Offer free technical support for 30 days after a purchase

IV. Serve free cappuccinos in the store

V. Offer a store reward card in which in-store purchases count toward future rewards

Reference no: EM13837353

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