Question

How monopolistic competition combines the features of monopoly and perfect competition?

Answer 1

monopolistic competition includes the features of monopoly and perfect competition. trademarks or brand name gives some monopoly power to the firms. each firm tends to exercise some control over price for their product.

on the other hand since many firms are producing a commodity like toothpaste there is competition in the market. no firm is able to exercise full control over price of the product.thus we can say that a firmunder monopolistic competition exercise only a partial control over price.