What is the meaning of monopolistic competition?

A market structure in which several or many sellers each produce similar, but slightly differentiated products. Each producer can set its price and quantity without affecting the marketplace as a whole.

 

The following are the features or characteristics of monopolistic competition:

 

1. Large Number of Sellers

2. Product Differentiation

3. Freedom of Entry and Exit

4. Selling Cost

5. Absence of Interdependence

6. Two Dimensional Competition

 

A type of competition within an industry where:1. All firms produce similar yet not perfectly substitutable products.2. All firms are able to enter the industry if the profits are attractive.3. All firms are profit maximizers.4. All firms have some market power, which means none are price takers.