Extended Essay in

Economics

To what extent does Wonton (dumpling soup)

market in Binhu District, Wuxi fulfill the
characteristics of monopolistic competition?

Word Count:3993

I
Acknowledgements

First, I would like to thank my teacher, supportive and helpful supervisor, for giving me

several treasured suggestions and assistance along my investigations.

Additionally, I am grateful to my supportive parents, who accompanied and shared the

difficulties I met in the exploration. Without their care and inspirations, I may never

complete this work.

Finally, I would like to tender my deepest thanks and express my gratitude to all the

anonymous participants of the interviews and questionnaires. The information

gathered from them are the of fundamental importance to the research, without which

it could be impossible for me to write this up.

II
Abstract

“Wonton” is one of the traditional Chinese food, especially popular in the south-east

region such as the city Wuxi. There are numerous Wonton retailers around Wuxi,

making it hard to analyze such abundant retailers. Consequently, I decide to highlight

a specific area in Wuxi city, Binhu District, one of Wuxi’s biggest districts, and then

initiate research and paper.

The purpose of this research is to investigate the extent to which the Wonton

(dumpling soup) in Wuxi fulfill the characteristics of monopolistic competition.

Individual retailers do not have a significant market power, having slight ability to

fluctuate prices. The price is particularly of great significances in the Wonton market.

Since there are no large-sized firms dominating the market, ample small retailers

compete with each other. While some characteristics of monopolistic competition are

present—different types of shops with various prices such as chain retailers and

individual retailers—most of Wonton retailers in Binhu District have very similar prices.

Secondary data have been polled through the internet, mostly from the official website

for the local shop information section. To make sure the availability and accuracy of

data, I went to each random-selected Wonton retailers’ stores and interviewed two

III
owners and some consumers in the shops. To achieve a further understanding of

consumers’ behaviors, 75 people were asked to complete two questionnaires

(APPENDIX I II). After analyzing the information from the sample surveys, it provided

me with insights into how consumer decisions influence the market.

In conclusion, the hypothesis “the market structure of Wonton market in Binhu

District, Wuxi is monopolistic competition in nature” is supported to a large extent.

The Wonton market in Wuxi showed the product differentiation to some degree.

Word account 279

IV
 Table of contents
I. Introduction ........................................................................................................ 1

II. Methodology ....................................................................................................... 2

2.1 Selecting Retailers in Wuxi .............................................................................. 2

2.2 Maps ................................................................................................................ 3

III. Theories .............................................................................................................. 5

3.1Monopolistic competition assumptions ............................................................. 6

3.2 Market structures other than monopolistic competition .................................... 8

3.2.1 Perfect competition ........................................................................................... 8
3.2.2 Oligopoly and Monopoly ...................................................................................... 8

IV. Analysis .............................................................................................................. 9

4.1 Number of firms/retailers in one particular industry. ....................................... 9

4.2 Whether or not the barriers exist. ................................................................. 10

4.3 Prices of Wonton for different retailers. ........................................................ 11

4.4 Whether or not Wonton retailers produce homogeneous products in Binhu

District. ................................................................................................................. 16

4.5 Wonton retailers in Binhu District are price-takers or price-makers? ........... 17

4.6 Do consumers and producers both have perfect knowledge about the
market? ..................................................................................................................... 17

4.7 Whether or not Wonton retailers in Binhu District earn normal profit or
abnormal profit (Economic profit). ....................................................................... 18

4.8 Customer Survey ......................................................................................... 21

V. Conclusion and evaluation ............................................................................ 23

VI. Limitations and reflections ............................................................................. 25

VII. Bibliography.................................................................................................... 28

VIII. Appendices ................................................................................................... 30

8.1 Appendix I .................................................................................................... 30

8.2 Appendix II ................................................................................................... 32

8.3 Appendix II

V
I. Introduction

One of my favorite food is “Wonton (called dumpling soup in Chinese), a famous type

of dumpling commonly found in a number of Chinese cuisines. Different regions in

China have various cooking styles and recipes. In my hometown, Wuxi, there are

several kinds of Wonton retailers located in a variety of regions. Different Wonton

retailers charge different prices and offer diversify services to consumers.

For the reason that one day I might initiate a Wonton shop by myself near my house

in Binhu District, I became eager to dig deeply into the structure of Wonton market and

thus laid foundation for future.

As ample of choices are provided, I wondered what are some factors affecting the

consumers’ decision to choose one or two particular Wonton shops. Thus, several

questions raised: how do retailers encourage or advocate consumers to consume or

stay in their shops? What're the relationships between each Wonton retailers? All in

all, these questions have motivated me to ask to what extent does the Wonton

(dumpling soup) in Wuxi fulfill the characteristics of monopolistic competition?

1
II. Methodology

The research I planned would be based on both primary and secondary data: this

combination offered me a clear outline of the essay:

The primary research would be conducted by asking random-selected consumers to

fill in questionnaires. I planned to use randomly sampling method to see the factors

that may influence the decision made by consumers. Furthermore, I might interview

some Wonton retailers and ask them to do some surveys. The secondary research

was conducted in the form of searching the internet, especially in official websites of

Wonton retailers. Thus, I would receive prices and services provided by each Wonton

retailers in Binhu District. Based on data collected online, I would construct figures and

models to analyze futures.

2.1 Selecting Retailers in Wuxi

a) Wonton retailers were selected within the “Binhu District” which is one of the 5

largest districts in the city. Within the district, there is over 6 million people and

contains over 20 independent Wonton retailers. In order to find the market structure of

Wonton in Wuxi, I chose 10 Wonton retailers which are, compared to others, large-

scaled and more popular among the citizens in Wuxi.

2
 There are 5 different kinds of shops among these 10 retailers:

a. Chain stores all around China (Price all the same, relatively high price)

b. Chain stores in Jiangsu Province (Same Price)

c. Chain stores in Wuxi (relatively cheap and well treated)

d. Single shop with popularity (have their unique favor with fair pricing)

e. Street peddler

2.2 Maps

Figure 1: Map in Binhu District, Wuxi

This is a map of the “Binhu District”, Wuxi. The red points on maps represent ample

of Wonton shops in the area. Different numbers represent different retailers I selected.

From the map, apparently, the shops are spread out and some of them are

concentrated in a particular area or surround it.

3


Figure 2: Different Wonton categories

Prices and pictures of certain Wonton retailers are showed in Figure 2.

4
III. Theories

Considered the ample Wonton retailers in Wuxi, I confirmed that the market structure

of Wonton is not monopoly which means a few firms dominate the whole industry

Figure 3: The hypothetical market structures

Here is a graph which illustrates the 4 types of market structures. Since my research

question is that “To what extent does the Wonton (dumpling soup) in Wuxi fulfill

the characteristics of monopolistic competition?”, I have to distinguish each type

of market structure and analyze them in the next step.

“The features of perfect competition are very rare in the real world. However, perfect

competition is as important economic model to compare other models”, Tejvan,

studied PPE at LMH, Oxford University said and emphasized that there are some

characteristics for the perfect competitive market (Tejvan). Several essential

assumptions are required to demonstrate below.

5
3.1Monopolistic competition assumptions

3.1.1 Large number of small firms, consumers and producers.

The industry is made up of a very large number of firms. There are a large number of

consumers who are willing to buy the products at a given price and a large number of

producers with the willingness to supply the product at the given price. Each firm is so

small, compare to the size of the industry, that serve as price-taker and it is not capable

of changing its output to have a noticeable effect on the industry.

3.1.2 Firms produce heterogeneous/differentiate products.

It is of high possibility for consumers to distinguish between goods produced in one

firm than that of the others. Some brand firms exist and other factors try to make

different goods there(Blink and Dorton 121).

3.1.3 No significant barriers for firms to enter or leave the industry.

The easiness of entry makes a large number of potential business waiting to enter the

industry easier to join the market. Therefore, it is called potential competition. Potential

competition limits prices under particular conditions (Hall). The potential barrier exists

probably be the brand name of the firm, patents, cost barriers and so on.

6
3.1.4 Factor mobility and perfect knowledge for consumers

and producers.

In the long run, factors of production are completely free to alter, allowing some long-

term adjustments to take place. While the producers are fully aware of the market

prices and cost in the whole production, consumers can achieve a full understanding

of not only the prices of products, but rather the qualities and availabilities for the

products.

3.1.5 Profit-Maximization and Normal profit.

The goal of perfectly competitive firms is to maximize their profits. However, under this

circumstance, firms usually earn normal profits (implicit profits) Normal profit is a

component of (implicit) costs. Enterprise profit is usually composed of normal profit

and the profit that a business owner considers necessary to make running the

business. For instance, it is comparable to the next best amount the entrepreneur

could earn doing another job (Carbaugh). There is no incentive for firms to either enter

or leave the industry in the long run when one industry reaches its long-run equilibrium

(Lipsey).

7
 3.2 Market structures other than monopolistic competition

In summary, monopolistic competition is a couple of theoretical concepts with “many

firms producing differentiated products” and “no barriers are exit to obstruct the entry

and exit”. Compared with other market structures, there are some differences list

below:

3.2.1 Perfect competition

As mentioned above, perfect competition is very similar with the monopolistic

competition except one characteristic—product differentiation. Perfectly competitive

firms produce homogeneous products in market.

3.2.2 Oligopoly and Monopoly

Number of firms in the industry is of vital significance when taking it into consideration.

In oligopoly, “a few firms dominate on particular market” (Economics Online). Besides

the few firms which with great manipulate power over the market, there may be ample

of firms in the market as well. Simultaneously, monopoly can be defined as one or two

firms dominating the market and it is a broad view and may depend on how narrowly

the industry is defined. For instance, the only retail shop in the Wuxi No.1 High School

becomes a monopoly automatically.

8
IV. Analysis

The only difference between the perfect competition market and monopolistic

competitive market is the product differentiation (Blink and Dorton 121). With regard

to the existence of the chain shop and its critical influence in Wuxi, “Oligopoly” will be

discussed.

Consequently, I first drove three types of market structures into two major groups:

Group 1 includes the perfect competition and monopolistic competition and oligopoly

is in the other group (Group 2). I firstly considered the dominant differences between

these two groups to facilitate determining the market structure of Wonton.

4.1 Number of firms/retailers in one particular industry.

To illustrate the number of firms, I used secondary data which mainly can be seen on

the map.

Figure 4: number of Wonton retailers

9
There are a large number of Wonton retailers in “Binhu District”. This didn’t match the

concepts of oligopoly firms which a few firms dominate the market share of the industry.

In contrast, large number of Wonton retailers fulfilled the characteristic of Group1.

4.2 Whether or not the barriers exist.

According to the Wuxi Gov. official website, retailers need to get certain licenses from

different government department, such as business license and health permit.

Usually, when retailers get all the licenses, they can initiate Wonton shops. Then, there

are no significant barriers which obstruct firms to enter the industry since the licenses

are not difficult to achieve.

“Loyalty of consumers” is one of great impact: Some Wonton shops were existed over

one hundred years ago in Wuxi. Most of these shops have a good reputation and local

consumers are accustomed to their flavors. However, in “Binhu District” this problem

becomes less important because “Binhu District” is a newly developed district in Wuxi.

Consequently, there is few century-aged Wonton shop here.

Fixed costs such as rent, government levying tax, and proper machinery may become

barriers. A few Sun-rise Wonton retailers cannot afford the costs of renting a tangible

shop and finally become the “Street peddler”. At this place, some chain shops and

10
prestigious shops may have the edge on —being well-decorated outlets in city-

center.

4.3 Prices of Wonton for different retailers.

I mainly focused on 10 representative Wonton retailers in Binhu District. They are from

individual shops and chain shops. Since all their names are in Chinese, I named the

10 shops No.1 to No.10. The data was gathered from the internet and I made a table

and a bar to illustrate the prices.

(Note: Retailers No.5 is a typical Street peddler; Retailers No.4 is one of the chain

retailers around China.)

Column1 Column2 Figure 5 &6

Wonton
retailers Prices

No.1 CN¥9.00

No.2 CN¥7.50

No.3 CN¥7.00

No.4 CN¥12.00

No.5 CN¥3.50

No.6 CN¥8.00

No.7 CN¥7.00

No.8 CN¥7.00

No.9 CN¥7.00

No.10 CN¥6.50

From the diagram, the mode is CN¥7.00. However, there are still some differences
11
between each retailer.

Figure 7-stastistics models

All the retailers in the bar have very similar prices for 500- gram- pork Wonton. These

single shops with great popularity focus on selling Wonton independently so that the

price difference is small, all CN¥0.5 for the maximum. A few price fluctuations will have

huge impact on the consumer’s decision.

12

Figure 8- background of different retailers

In the Figure 8, retailers have distinct background: for example, the shop No.4(shop

type a) is a chain shop that spread across China. A chain shop, all the prices are the

same in different regions, No.4 has a much higher price than the average in Wuxi.

Since the flagship store of No.4 is set in Beijing, the capital of China, prices for the

shop No.4 are pegged to the level of consumers’ ability in Beijing.

Likewise, shop No.1 (shop type b) is one of the chain shops spreads across Jiangsu

Province. Wuxi is one of cities in Jiangsu Province and has a relatively low average

price level than others.

Shop No.6 (shop type c) has an average price of CN¥8 for 500-gram-pork Wonton.

13
As one of the chain shops spread across the region of Wuxi, the price level is about

the same as local individual retailers. The reason behind this is the competition among

different retailers. Owing to the chain shop is mostly running in Wuxi. The setting of

the prices should fit in the local conditions. However, the price is a little bit higher than

the average price which is CN¥7 in Wuxi due to the fee spent to join a franchise. Every

chain shop needs to pay the alliance expense to the flagship store and have the same

decorative style as the flagship store.

There are several Itinerant vendors in Wuxi as the shop No.5 does. These shops

usually don’t have to store front—several of them even don’t have a license. They

often in the form of a dining car or sell their product in the street. Price in this type of

retailers is much lower than the formal Wonton producer. Their cost of production is

reduced by not paying the rent or license fee etc. Nevertheless, there are not many

Itinerant vendors in Binhu District because the enforcement of “City Administration” in

Binhu District.

I sent the surveys to 75 people who are all in different age-groups, showing the

consumer expenditure in Binhu District.

14
 Figure 9

In the chart, it demonstrated that about 33% sampled consumers would like to spend

less than CN¥10 on Wonton while 40% in the orange region of consumers usually

spend CN¥10 to CN¥20 on buying Wonton. Only a few people consume between

CN¥20 to CN¥40 that few people are willing to spend over CN¥50 on Wonton. Thus,

the data illustrated that the majority of consumers in Binhu District, Wuxi won’t spend

more than CN¥20 on Wonton for their meals.

15
4.4 Whether or not Wonton retailers produce homogeneous

products in Binhu District.

From the internet, I noticed that there are four types of shop that sell the Wonton in

Binhu district:

A. Only provide Wonton with different flavors

B. Shops that sell flour-made food, such as noodles, steamed bun and

Wonton

C. A small restaurant provides various food include Wonton

D. Others

Figure 10: the diversity of Wonton shops

However, most Wonton retailers in Binhu District solely sell Wonton with different

flavors, which means the types of A in the table. There are simply a few shops that

sell flour-made food in the region and they are not famous for Wonton. I was

surprised at the copious shops which all sell Wonton that may be some tiny, little

difference exist between various retailers, such as “Beef Wonton”, “Vegetable

Wonton”, “Shrimp Wonton”. Though diversity of filling in wonton, this didn’t affect the

consumption much.

16
 4.5 Wonton retailers in Binhu District are price-takers or

price-makers?

It is of difficulty to recognize which role Wonton retailers play in the market. However,

the data demonstrated that the prices given by Wonton retailers are mostly depending

on the market prices. As a result, Wonton retailers are very likely serve as price-takers.

4.6 Do consumers and producers both have perfect

knowledge about the market?

This would be explained based on the particularity and the characteristics of Wonton.

Wonton is one kind of traditional Chinese food and it is of ease to make. The material

and ingredients for making Wonton are very clear and easy to buy from the market,

such as dumpling pastry and pork. As there is abundant cooking

resources(recipes)available online, consumers can impart the knowledge and better

themselves.

For the Wonton producers(retailers), they can easily gather and modify their

information by asking their customers in the shop.

All in all, both consumers and producers have perfect information and knowledge

about the market of Wonton.

17
4.7 Whether or not Wonton retailers in Binhu District earn

normal profit or abnormal profit (Economic profit).

From some brief interviews with each of the 10 Wonton retailers, I found that most of

them earn abnormal profit in the short run. Then, they undergo a process from short-

term abnormal profits to long-run normal profits.

Figure 11: Economic profit earned by retailers in the short run.

S MC
Price

AC

P P D=AR=MR

Abnormal profit

D
O Q Quantity
O q Quantity

Figure 11

Retailers make abnormal profits in the short run which means they are more than

covering their total cost of production, including opportunity costs (Blink and Dorton

105).

In the graph, it is assumed that Wonton retailers are selling at the industry price, P,

producing its maximum quantity, q, where marginal cost (MC) equals to marginal

revenue(MR). Moreover, it is the average cost curve (AC) which is in yellow line

18
determines the cost per unit of Wonton production. Thus, when MC=AC, Wonton

retailers make abnormal profits which are represented in the shaded region.

However, this situation changes after a period of time which is in the long run.

Figure 12: The movement from short-run abnormal profit to long-run normal

profit.

S MC
Price

S1 AC

P P D=AR=MR

D1=AR1=MR1

D Figure 12

0 Q Q1 Quantity 0 q1 q Quantity

It is estimated that the short-run abnormal profits became an incentive for more

Wonton retailers to enter the market. Since the absence of barriers, more retailers

enter the market, shift the supply (S) curve to the right (S1). At this point, Wonton

retailers take the point of “D1=AR1=MR1”. Thus, all the retailers make normal profits

with the price per unit equal to the cost per unit. While the abnormal profit has all gone,

the existing Wonton retailers won’t leave the market and new retailers won’t come into

the market either so that the industry is in the long-run equilibrium situation (Blink and

Dorton 105).

19
In conclusion, the individual Wonton retailers may earn abnormal profit in the short-

run and earn normal profit in the long term. In this case, all the expressions mentioned

above seemed to confirm the characteristics of Group 1, including perfect competition

and monopolistic competition.

I also noticed that there are some non-price factors influence Wonton consumption.

Consequently, it is desirable to know the factors or the role “Customer Survey”, in

the form of sending out questionnaires, plays in the process.

20
4.8 Customer Survey

I have sent the questionnaire survey to 75 people who are in different year groups and

live in the Binhu District. As a result, the survey consists of 75 people and each people

will be given two short questionnaires (Appendix I and Appendix Il) to see what their

thoughts regarding Wonton retailers. The following figures will reflect the responses to

the surveys.

Figure 13 : When decide to buy/eat Wonton, which retailers do you prefer?

From the chart, shops that sell flour-made food, such as noodles, steamed bun and

Wonton are most favorable by customers which over 40% people choose to consume

there. However, shops which only provide Wonton are merely 16%. This is also much

lower than the small restaurant which provides various food (27%).From the figure, it

21
is obvious that consumers prefer the shops that provide a variety of choices. For

instance, retailers not only sell the Wonton but also noodles, steamed bun and so on.

Others may include purchasing food online or cook by oneself.

Likewise, I also do the survey of “What are the factors to choose one particular Wonton

shop?”, “How does “price” influence people when they choose Wonton shop? “and

“How important is the location of one particular Wonton shop?” The data and statistical

analysis are in the Appendix III.

In summary, certain non-price factors such as the location, diversity of food choices

provided by the shop, and the price of Wonton all have impacts on the markets as I

found from my sample analysis. Among these variables, prices are of vital

significances since the market is price-sensitive and over 40% of surveyed consumers

are willing to switch to another retailer when the price is lower.

22
V. Conclusion and evaluation

The hypothesis “to what extent does the Wonton (dumpling soup) in Wuxi fulfill

the characteristics of monopolistic competition?” is supported to a large extent.

I was inclined to believe the market structure of Wonton in Binhu District is perfect

competition when raising the research question. However, things have changed as the

writing continued. Corresponding to the assumptions, the Wonton market is more likely

to be monopolistically competitive.

Firstly, I ensured that the answer is in Group1 instead of Group2. Apparently, the

market structure of Wonton in Binhu District is not oligopoly since the price is stable

and the barriers of entry cannot obstruct retailers from entering except the vendors.

For the reason that no significant barriers exist and there are a large number of

Wonton retailers within the region, and all these factors didn’t embody the features

of oligopoly.

Then, I should discuss within the Group1 (includes perfect competition and

monopolistic competition) that the two market structures have profoundly similar

characteristics such as the perfect resources mobility and knowledge exchange

23
between consumers and producers. However, one of the most significant differences

is the widespread product differentiation. In the monopolistic market, the players

sell goods which are distinct to each other, and therefore, are able to charge different

prices (Admin).

The perfect competitive market is efficient that a shift in price may immediately benefit

one individual or several individuals (Boundless Economics). Given the figures

provided, Binhu District’s Wonton market fills in this situation. Corroborate to customer

surveys (Appendix I II), consumers are very sensitive to the price that over 40%

informant think the price is the factor of the most significance they consider about.

Owing to data polled and the analysis demonstrated, I implied that though there are

no significant differences in prices among the Wonton retailers and price variance is

fairly small, the market is not purely perfectly competitive. Wonton retailers in Binhu

District sell slightly differentiated goods, quite a few of them selling products other than

Wonton. Indeed, the market structure of Wonton market is more and more likely to be

oligopoly as far as the emergence of chain shops and branded Wonton shop.

Furthermore, the retail market may end up as oligopoly in the future if the chain shops’

influences continuous boosting. Brand loyalty may play an increasingly essential role

when consumers taking factors into consideration. To reiterate, the market structure

of Wonton in Binhu District, Wuxi is monopolistic competition.

24
VI. Limitations and reflections

Fulfill the characteristics of monopolistic competition, Wonton retailers have

differentiated products. For further competition, retailers may use various strategies to

attract more consumers, such as improving the qualities, advertising, bettering brand

names etc. Thus, more competitions are involved in the process and the non-price

determents may have more impacts on the consumers’ decision-making.

The reliability of this exploration is restricted by some variables: certain affairs remain

unsolved. For instance, some questions arose from the surveys: there are some non-

price factors influencing consumers’ decisions such as the location, hygiene and

decorations of the shop. Moreover, “brand name” is worth considering. Each year,

thousands of people come to one particular Wonton shop for reputation. It’s hard to

determine to what extent do these osteoporosis features influence the consumers.

Furthermore, the growing strength and market-multiplying power of some chain

Wonton retailers may create uncertainties someday—the growing tendency of

monopoly and disappearance of small retailers.

Additionally, since the essay is relied on some primary data, some retailers may

insensibly modify their answers owing to the sensitive data— only four retailer owners

were willing to be interviewed which means the data is not accurate. Consequently, I

25
didn’t put them into the analysis. Compared to the retailer owners, the questionnaires

were much more accurate. I surveyed 75 people in different age groups, including

adults, teenagers, elderly etc.; however, the size of sample is limited and cannot

represent general consumers’ thoughts. To enhance the accuracy and the sufficiency

of data, sample size should be increased and more detailed information should be

collected from the retailers.

Limitations of the economic model are unavoidable: the essay was based on the

economic theories which only rely on the Ceteris Paribis; however, in reality, the theory

may not hold true, because the popularity of Wonton shop, or “brand loyalty”. It is

difficult to utilize the raw data to demonstrate the economic profits earned by Wonton

retailers; instead, I imposed several assumptions and graphs.

Similarly, the market is dynamic—although the Wonton prices in the market are

relatively fixed, the theory does not account for the price fluctuations of the raw Wonton

materials owing to the seasoning changes, such as pork and green vegetables. Each

retailer has various supplying channels and thus attribute to different variable costs

and create some other considerable variables.

26
Also, nowadays, there is an increasing number of population taking notice on the

quality of food. The price may not be the dominant factor to consider soon and this

may influence the Wonton market profoundly.

In a wider picture, unsolved questions offer opportunities on further research. Since

the lack of statistic data to show whether or not the barrier exists in Wonton market, it

would be meaningful to do more surveys in order to achieve sets of precise data and

comprehend how large a “small firm” should be.

27
VII. Bibliography

Adain. “Difference Between Perfect Competition and Monopolistic Competition”. 16

May 2012. Web. 10 Apr 2016. <http://www.differencebetween.com/difference-
between-perfect-competition-and-vs-monopolistic-competition/ >.

Behaviour of Monopolistic Firms . 14 Apr 2016

<http://homes.chass.utoronto.ca/~reak/eco100/100_6.htm>.

Blink, Jocelyn and Jan Dorton. Economics. IB Diploma Edition. 2nd Edition. Oxford:
OUP, 2012.

Boundless. “Boundless Economics.”. Monopolistic Competition Compared to Perfect

Competition.” . 26 May 2016. Web. 2 July 2015
<https://www.boundless.com/economics/textbooks/boundless-economics-
textbook/monopolistic-competition-12/monopolistic-competition-75/monopolistic-
competition-compared-to-perfect-competition-285-12382/>.

Dictionary, Business. Nonnal Profit. (n.d.). 2 Aug 2014.Web. 5 Aug. 2016

<http://www.businessdictionary.cornJdefinition/normal-profit.html>.

Difference Between Perfect Competition and Monopolistic Competition . 16 Aug.

2016 <http://www.differencebetween.com/difference-between-perfect-
competition-and-vs-monopolistic-competition/ >.

Econ: Market Structures Review . 23. Aug. 2016

<https://tamoclass.wordpress.com/category/market-structures/ >.

Hall, Robert E. POTENTIAL COMPETITION, LIMIT PRICING, AND PRICE

ELEVATION FROM EXCLUSIONARY CONDUCT. 2008. Web. 14 July 2016 <
http://web.stanford.edu/~rehall/PotentialCompetition.pdf >.

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Oligopoly Defining and measuring oligopoly. 2016. 25 Aug 2016
<http://www.economicsonline.co.uk/Business_economics/Oligopoly.html>.

Tejvan. Perfect competition. 2015. 12 Aug 2016 <

http://www.economicshelp.org/microessays/markets/perfect-competition/ >.

29
VIII. Appendices

8.1 Appendix I

QUESTIONARE 1.1
Through the questionnaire, I plan to gather the data which I used for my
extended essay, my research question is that
§ To what extent does the Wonton dumpling soup) in Wuxi fulfill the
characteristics of monopolistic competition?

Specific care has been taken to ensure your privacy and confidentiality.
Please answer the question and circle the choice.
Age: Gender:

1. How many times a week would you go to Wonton shop?

A. 1 – 2 times
B. 3 – 4 times
C. over 5 times
D. none

2. How do you feel the price of Wonton when you make the decision?
A. Price is the dominant part I considered
B. Price is not important at all, if Wonton is delicious
C. Price I will look but not consider the most
D. Pay more attention on the other factors

3. Which type of the Wonton shop do you prefer?

A. Only provide Wonton with different flavors
B. Shops that sell flour-made food, such as noodles, steamed bun and
Wonton
C. A small restaurant provide various food include Wonton
D. Others

4. Have you considered the location of the shop when you make the decision?
30
 A. Yes, very much.
B. I consider as one part of the Wonton shop
C. It is OK that I can withstand.
D. Not at all, location doesn't matter.

5. Have you considered the quality of service in the shop when you make the
decision?
A. Yes, very much.
B. I consider as one part of the Wonton shop
C. It is OK that I can withstand.
D. Not at all, directly ignore it.

6. What is the determent factor for you to choose a shop to eat huntun?
A. The price
B. The hygiene
C. The service
D. The taste

7. What are the factors for you to choose one specific huntun shop?( can choose
more than one option)
A. The different kinds of food
B. The serving time
C. The decorations in the shop
D. The price
E. Sanitation conditions in the shop

8. Which service do you prefer that the shop may offer?

A. Free delivery service.
B. Charged delivery service with shorter serving time.

9. Your valuable suggestions and advice for choosing the huntun shop.

THANK YOU FOR THE TIME AND YOUR CONTRIBUTIONS.

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8.2 Appendix II

QUESTIONARE 1.2
Through the questionnaire, I plan to gather the data which I used for my
extended essay, my research question is that
§ To what extent does the Wonton (dumpling soup) in Wuxi fulfill the
characteristics of monopolistic competition?

Specific care has been taken to ensure your privacy and confidentiality.
Please answer the question and circle the choice.
1. What’s your identity?
A. Student
B. Company employee
C. Elderly
D. Nearby resident
E. Pass by

2. What’s your age?

A. Under the age of 20
B. 20 to 30 years’ old
C. 30 to 40 years’ old
D. 40 to 50 years’ old
E. Age above 50

3. Which food do you like most in this shop?(can choose more than one option)
A. Wonton
B. Korean rice
C. Korean noodles in soup
D. Steam bun
E. Other food and snakes

4. What is the maximum consumption you have spent in this shop?

A. Within 10 yuan
B. Within 20 yuan
C. 20 to 40 yuan
D. Above 50 yuan
E. Not sure

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 5. You come to the shop, to (can choose more than one option)?
A. Mainly breakfast
B. Mainly lunch
C. Mainly supper
D. Mainly bring away
E. Above all involved

6. What is the most important reason that you choose the dinner? (please select
one or two options)
A. Products taste good
B. Prices are affordable
C. Good environment
D. Served dishes quickly
E. The other reasons

7. Are you interested in our delivery service?

A. Very much
B. Just so-so
C. It doesn't matter

8. How do you feel about the service provided in the shop?

9. Do you have other suggestions and advice?

THANK YOU FOR THE TIME AND YOUR CONTRIBUTIONS.

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 8.3 Appendix III

Customer Survey Summary(CSS)

I. What are the factors to choose one particular Wonton shop?

This question is Muti-choices so that people can choose any factors that influence

their decisions. From the figure, people concern the price more than any other factors.

That explains why the individual Wonton retailers in Binhu District all have very similar

prices.

The diversity of food is the secondly considerable factor that consumers think about.

From the 27% of population, I knew that the product differentiation was pretty

important for the consumers.

To continue exploring the reasons to choose dinner, I have asked more specifically

and turned the answers into the chart below.

To specify how much consumers, consider about the price as a role in the decision-

making process, I have made following statistics and converted them into a chart.

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II. How does “price” influence people when they choose Wonton shop?

From the chart, 44% of consumers think “price” is the dominant factor when they

choose Wonton shop. As a result, the left 54% consumes think that there are also

some other factors can influence the decision. This may explain the chart in XXX that

serving time and the decorations may have some impact on consumers which served

as non-price factor. These non-price factor are 47% in total and is worth thinking about.

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III. How important is the location of one particular Wonton shop?

From my standpoint of view, the location does influence the business of one particular

Wonton shop.

36