ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -MONOPOLISTIC COMPETITION-is the market structure that has all the conditions of a perfect competition EXCEPT for identical products. By making its product a little different, the monopolistic competitor tries to attract more customers and monopolize a small portion of the market. Easy entry, easy exit.

Detailed explanation-2: -Pure or perfect competition is a market structure defined by a large number of small firms competing against each other. A single firm doesn’t have significant marketing power, and as a result, the industry produces an optimal level of output because firms don’t have the ability to influence market prices.

Detailed explanation-3: -Monopolistic competition is much like pure competition in that there are many suppliers and the barriers to entry are low. However, the suppliers try to achieve some price advantages by differentiating their products from other similar products.

Detailed explanation-4: -a marketing situation in which there are a large number of sellers of a product which cannot be differentiated and, thus, no one firm has a significant influence on price. Other prevailing conditions are ease of entry of new firms into the market and perfect market information.