ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In monopolistic competition, supply and demand forces do not dictate pricing. Firms are selling similar, yet distinct products, so firms determine the pricing. Product differentiation is the key feature of monopolistic competition, where products are marketed by quality or brand.

Detailed explanation-2: -Monopolistic competition is a type of imperfect competition such that there are many producers competing against each other, but selling products that are differentiated from one another (e.g. by branding or quality) and hence are not perfect substitutes.

Detailed explanation-3: -Monopolistic competition is a market structure characterized by a large number of firms selling products that are close substitutes yet different enough that each firm’s demand curve slopes downward.

Detailed explanation-4: -The characteristics of monopolistic competition include the following: The presence of many companies. Each company produces similar but differentiated products. Companies are not price takers.