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 chimney is to some extent an independent structure, standing on the ground, and rising through the house to the heavens; even after the house is burned it still stands sometimes, and its importance and independence are apparent.”
—Henry David Thoreau (1817–1862)
“The decision to have a child is both a private and a public decision, for children are our collective future.”
—Sylvia Ann Hewitt (20th century)
“So, laying his cheek against the dresser’s wooden one,
He died making up stories, the ones
Not every child wanted to listen to.”
—John Ashbery (b. 1927)