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:
“The ability to secure an independent livelihood and honorable employ suited to her education and capacities is the only true foundation of the social elevation of woman, even in the very highest classes of society. While she continues to be educated only to be somebody’s wife, and is left without any aim in life till that somebody either in love, or in pity, or in selfish regard at last grants her the opportunity, she can never be truly independent.”
—Catherine E. Beecher (1800–1878)
“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)
“But it is found that the machine unmans the user. What he gains in making cloth, he loses in general power. There should be a temperance in making cloth, as well as in eating.”
—Ralph Waldo Emerson (1803–1882)