MONOPOLISTIC COMPETITION

Developed by Edward H Chamberlin

It is a blend of monopoly & perfect competition

It is a market situation in which there are many sellers of a particular product,but the product is differentiated

Monopolistic Competition

Large number of sellers

Product differentiation

Free entry & exit of firms

Non price competition

Price policy

FEATURES

Selling cost

Less mobility

Imperfect knowledge

Cont’d

No significant barriers to entry

Differentiation creates diversity, choice and utility

Dynamically efficient and innovative in terms of new production process and products

Advantages

Some doesn't create utility generate waste

Profit maximization

Disadvantages