The condition of monopolistic Competition is
Answers
Answer:
Monopolistic competition is said to be that kind of competition in the market in which various firms sell slightly different products from one other and there are zero barriers to entering into such a market structure.
Explanation:
The conditions requisite for a monopolistic competition are:-
1. The market should have various firms and that too medium-sized. In other words, there should be a large number of medium-sized sellers.
2. With large numbers of sellers, there should be a large number of buyers as well in such a market structure.
3. The entry and exit to such a market should be free i.e. there should be zero barriers available while entering or exiting the monopolistic competition.
4. Every firm present in the market should sell similar but differentiated products. Such differentiation in products can be in size, colour, shape, brand name and even taste.
5. Firms in monopolistic market seeks more to maximise their profits.
Examples:- Restaurants, pubs, clothing etc.