Characteristics of Monopolistically Competitive Markets
- A monopolistic market structure is one in which there are many firms offering a similar product but with some product differentiation
- Examples include
- Nail salons, hairdressing or barber shops, massage parlours, fruit and vegetable stores
Diagram: Monopolistic Competition
Monopolistic competition should not be confused with a monopoly. As a market structure, it sits closer to perfect competition
Characteristics of Monopolistic Competition
Characteristic |
Explanation |
Characteristic |
Explanation |
Nature of the product |
|
Degree of efficiency |
|
Customer loyalty |
|
Type of profit |
|
Price taker or maker? |
|
Level of market power |
|
Barriers to entry |
|
Slope of the demand curve |
|
Number of firms |
|