What is a monopolistic competition?
monopolistic competition is a market where many competitors provide similar products that can be distinguished on the basis of properties that exceed simple costs. This type of market is very common worldwide for products for a wide range of price points. There are times when consumers can benefit from monopolistic competition, while in other cases they may lose depending on the product and market details. Also, it is not unusual to see the markets with a mixture of characteristics and it is somewhat rare to find a market that fits neatly and purely into one economic theory.
A simple example of a monopolistic competition can be seen when selling cars. All cars are designed for the same purpose, which should provide transport for people and goods. However, there are many different types of cars on the market. Consumers can choose between different types of body, price points, colors, etc. No one on the market dominates car manufacturers SMNO competitors providing similar products in the competition of individual companiesFor setting prices of their products without affecting prices on a larger market, as no companies dominate on the market and consumers clearly perceive that they exist as "uneasy differences" among the products offered by competitors.
The concept of the monopolistic competition was first discussed in the 30th Economist Edward Hastings Chamberlin. Many economists have been exploring this concept since then that besides looking at other types of competition and the ways these markets work. Because many markets include competing producers, understanding how these manufacturers work on the market, it can be important for the market to study as a whole, and can also provide information that can use producers to strengthen their market position.
on the market characterized by monopolistic competition consumers often note that companies work hard to ensure that their products are differentiated and that these differences are used asSales points. For example, oral vehicle manufacturers encourage their consumers to compare their products with others, seek escorts from dental associations, use significant packaging, and take further steps to make their products excel. It should be noted that consumers may be willing to pay more for some products on such a market, because there are significant differences that have an impact on quality or performance and cause acceptable additional costs.