A monopolistically competitive market is characterised by:

Question

Quizplus · Accepted Answer

Monopolistically competitive markets have many small sellers selling differentiated products, which means the products are not identical but have some unique characteristics that differentiate them from competitors. This also implies that there is some degree of freedom for sellers to set prices as consumers may perceive differences in the products and be willing to pay different prices for them. Additionally, there are generally low barriers to entry, making it relatively easy for new firms to enter the market. Mutual interdependence in pricing decisions is also a feature of monopolistically competitive markets since the actions of one firm can have an impact on the others. However, the presence of a single seller with few suitable substitutes is more characteristic of a monopoly market structure.

A Monopolistically Competitive Market Is Characterised By