Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from one another.
Product differentiation is the process of distinguishing a product or service from others to make it more attractive to a target market.
The demand curve in a monopolistic competitive market slopes downward, which has several important implications for firms in this market.
Monopolistic competitive markets can lead to significant profits in the short-run, but are inefficient.
In the long run, firms in monopolistic competitive markets are highly inefficient and can only break even.
The key difference between perfectly competitive markets and monopolistically competitive ones is efficiency.
Monopolistic competitive markets are never efficient in any economic sense of the term.
Advertising and branding help firms in monopolistic competitive markets differentiate their products from those of their competitors.