Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

MONOPOLISTIC COMPETITION Definition & Legal Meaning

Definition & Citations:

Perfect competition and monopoly meet halfway in this specific type of market situation. Displays features both. Several competitors offer products that are close but not perfect substitutes. Prices are at average cost levels. Several firms freely enter this highly competitive market. These are features of perfect competition. However, some consumers prefer one product over the others. This preference is strong enough that these fans keep buying it even if its price increases. This gives its producer market power in a small amount. This is a feature of monopoly. Monopolistic competition is very common in every free market.

Disclaimer

This article contains general legal information but does not constitute professional legal advice for your particular situation. The Law Dictionary is not a law firm, and this page does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.