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.
What is MONOPOLISTIC COMPETITION?
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