ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Product differentiation is the key feature of monopolistic competition, where products are marketed by quality or brand. Demand is highly elastic, and any change in pricing can cause demand to shift from one competitor to another.

Detailed explanation-2: -Monopolistic competition refers to a market where many firms sell differentiated products. Differentiated products can arise from characteristics of the good or service, location from which the product is sold, intangible aspects of the product, and perceptions of the product.

Detailed explanation-3: -Companies in monopolistic competition produce differentiated products and compete mainly on non-price competition. The demand curves in individual companies for monopolistic competition are downward sloping, whereas perfect competition demonstrates a perfectly elastic demand schedule.

Detailed explanation-4: -3 Examples of Monopolistic Competition 1. Grocery stores: Grocery stores exist within a monopolistic market as there are a large number of firms that sell many of the same goods but with distinct branding and marketing. 2. Hotels: Hotels offer a prime example of monopolistic competition.

Detailed explanation-5: -A monopoly is the type of imperfect competition where a seller or producer captures the majority of the market share due to the lack of substitutes or competitors. A monopolistic competition is a type of imperfect competition where many sellers try to capture the market share by differentiating their products.