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InvestHub.com's
Finance Dictionary and Glossary of Investment Terms

Monopolistic Competition  

Definition 1.

A type of competition within an industry where:1. All firms produce similar yet not perfectly substitutable products.2. All firms are able to enter the industry if the profits are attractive.3. All firms are profit maximizers.4. All firms have some market power, which means none are price takers.
 

Definition 2.

A market structure in which several or many sellers each produce similar, but slightly differentiated products. Each producer can set its price and quantity without affecting the marketplace as a whole.
 
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