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3. Monopolistic Competition

Monopolistic Competition is a market structure where many firms sell similar but not identical products, allowing them to have some control over prices.

Characteristics:

  • Large number of firms.
  • Product differentiation (similar products, but with differences like brand or quality).
  • Some control over price.
  • Relatively low barriers to entry.

Real-Life Example:​

The fast-food industry is an example of monopolistic competition. While many firms sell burgers, each one offers slight variations in taste, quality, and service, allowing for brand differentiation.