Since all balls need to conform to the USGA tests, they are much more alike than different. In other words, golf ball

manufacturers are monopolistically competitive.

However, retail sales of golf balls are about $500 million per year, which means that many large companies have a

powerful incentive to persuade players that golf balls are highly differentiated and that it makes a huge difference

which one you choose. Sure, Tiger Woods can tell the difference. For the average amateur golfer who plays a few

times a summer—and who loses many golf balls to the woods and lake and needs to buy new ones—most golf balls

are pretty much indistinguishable.

How a Monopolistic Competitor Chooses Price and Quantity

The monopolistically competitive firm decides on its profit-maximizing quantity and price in much the same

way as a monopolist. A monopolistic competitor, like a monopolist, faces a downward-sloping demand curve,
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