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Market — Economics STD 11 Commerce — Question

Gujarat BoardEnglish MediumSTD 11 CommerceEconomicsMarket3 Marks
Question
What is meant by monopolistic competition $?$ Describe its characteristics.
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Answer

  • Monopolistic competition means the competition prevailing among the large group of producers producing close substitutes not perfect substitutes.
  • In this market, co-existence of monopoly and competition elements are seen. Monopolistic competition is one of the concept of imperfect competition.
  • Following characteristics are seen in monopolistic competition.
    • Sellers are in big numbers and unlimited buyers.
    • Product- differentiation.
    • Free entry - exit of the firm in the industry.
    • Necessity of selling cost.
    • Without price competition with price competition.
    • Producers, sellers and customers have complete knowledge of the market.
    • Control over price.

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