Monopolistic competition refers to that market structure where many sellers are there who sell differentiated products and therefore have some monopoly when it comes to pricing of their products. Given below are some of the characteristics of monopolistic competition –
1. In monopolistic competition there are large numbers of independent sellers of the same product and therefore no single firm or a company can set the price of a product, which is the reason it is not same as monopoly.
2. In monopolistic competition each seller of a product sells differentiated product, which implies that each company’s product is different from other and therefore it is not same as that of perfect competition where all the producers sells the same good.
3. Due to differentiated product each seller has some control over the price which the seller can charge from its customers.
4. Marketing of a product or service assumes great importance under monopolistic competition as the sellers can sell the product to its customers by showing them the products differentiating characteristics.
5. Under monopolistic competition there are not many barriers to entry (which are present in monopoly) and therefore any company can enter the market and compete with other players in the market.