In the 1920s and 1930s, economists became increasingly aware that there were industries that did not fit the model of perfect competition or pure monopoly. Two separate theories of monopolistic competition resulted. Edward Chamberlin of Harvard published the Theory of Monopolistic Competition in 1933. Chamberlin defined monopolistic competition as

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Edward Chamberlin defined monopolistic competition as a market situation with a relatively large number of producers offering similar but differentiated products. This differentiation allows each producer to have some degree of market power, since consumers may perceive differences between products and be willing to pay higher prices for certain brands or features.

In the 1920s and 1930s, Economists Became Increasingly Aware That