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Responses to Colleague Posts

Response to Post ONE

I totally agree with you about the definition of the monopolistic competition firms. You have given a good explanation that they can increase the demand for their products through improving the physical aspects of their products. I like the example that you have given about the place you work, Family Dollar. The explanation has made it clearer about how the firm can increase sales without necessarily advertising. In addition, I concur with your point that good location increases the sales of a monopolistic competitive firm.

Response to Post TWO

I concur with your explanation of the need and the wants in terms of consumption. This means that for one person to consume, he or she must have a want that is satisfied by another party. It is through the understanding of this exchange that I think that trading between two people is inevitable. It is an inevitable activity if the needs of one party have to be satisfied, which is the main essence of the utility of goods and services. Therefore, I agree that both parties are better off when two individuals trade goods.