Monopolistic Competition

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Definition: Monopolistic Competition

The concept of Monopolistic competition was given by Edward Hastings Chamberlin and it has the following characteristics:

  1. Sellers are high.
  2. Differentiated products.
  3. Entry and Exit barriers are low.
  4. Selling Cost is high because of additional cost incurred on product differentiation.
  5. Demand Curve downward slopping: The demand curve is elastic as it can sell high quantity at a lower price.

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