Your assignment is to prepare and submit a paper on principles of microeconomics. a single buyer in the entire business setting. Entry in such a market is restricted as a result of high cost or due to impediments which may be social, economic or even political. For instance the government can opt to create a monopoly over an industry. On the other side, monopolistic competition is generally a type of imperfect competition in that the competing producers sell products which are totally different from each other as goods but not necessarily perfect substitutes (Kamien 1982). Therefore, in a monopolistically competitive market, different firms can behave as if they are monopolies in the short-run by using market power to generate more profits. Later in the long-run, once other firms enter the same market, the benefits will be shared among them and the overall profit due to differential will considerably decrease with increase in competition. Having understood the basic principles about monopoly and monopolistically market structure, now it is very easy to anally the case in hand. As mentioned in the question, that in the year 2007 potato chip industry was operating as under monopolistically market.

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