Why is the administrative burden of regulating price in a monopolistically competitive market relatively large

Question

Quizplus · Accepted Answer

In a monopolistically competitive market, there are a large number of firms that produce differentiated products. As a result, regulating prices becomes a difficult task for the regulatory authorities, as they need to consider the differences in quality, features, and other attributes of the products offered by different firms. This makes tracking and regulating the prices of all firms in the market a time-consuming and administratively burdensome task.

Why Is the Administrative Burden of Regulating Price in a Monopolistically