<P> Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from one another ( e.g. by branding or quality ) and hence are not perfect substitutes . In monopolistic competition , a firm takes the prices charged by its rivals as given and ignores the impact of its own prices on the prices of other firms . In the presence of coercive government , monopolistic competition will fall into government - granted monopoly . Unlike perfect competition , the firm maintains spare capacity . Models of monopolistic competition are often used to model industries . Textbook examples of industries with market structures similar to monopolistic competition include restaurants , cereal , clothing , shoes , and service industries in large cities . The `` founding father '' of the theory of monopolistic competition is Edward Hastings Chamberlin , who wrote a pioneering book on the subject , Theory of Monopolistic Competition ( 1933 ) . Joan Robinson published a book The Economics of Imperfect Competition with a comparable theme of distinguishing perfect from imperfect competition . </P>
<P> Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from one another ( e.g. by branding or quality ) and hence are not perfect substitutes . In monopolistic competition , a firm takes the prices charged by its rivals as given and ignores the impact of its own prices on the prices of other firms . In the presence of coercive government , monopolistic competition will fall into government - granted monopoly . Unlike perfect competition , the firm maintains spare capacity . Models of monopolistic competition are often used to model industries . Textbook examples of industries with market structures similar to monopolistic competition include restaurants , cereal , clothing , shoes , and service industries in large cities . The `` founding father '' of the theory of monopolistic competition is Edward Hastings Chamberlin , who wrote a pioneering book on the subject , Theory of Monopolistic Competition ( 1933 ) . Joan Robinson published a book The Economics of Imperfect Competition with a comparable theme of distinguishing perfect from imperfect competition . </P>
monopolistic competition is a type of market structure in which
monopolistic competition is a type of market structure in which
many producers sell products that are differentiated from one another ( e.g. by branding or quality ) and hence are not perfect substitutes
many producers sell products that are differentiated from one another ( e.g. by branding or quality ) and hence are not perfect substitutes