Jeffrey's mom specifically asked for a CIP cast iron pan for her birthday. As Jeffrey scanned the stock in two department stores, he found ten different brands, none of which were CIP. When he found CIP in a kitchen specialty shop, he was challenged to tell the difference between his mom's choice and the others. He was reminded of his business class, in which he learned about monopolistic competition, where many sellers may be offering very similar products. Through various means, each seller differentiates his product from the competition.
Explanation:
Monopoly competition is a kind of imperfect competition being that many distributors sell the product which are distinguished (e.g. by branding or quality).
Examples of monopolistic competition : The restaurant business. Hotels and pubs. General specialist retailing. Consumer services, such as hairdressing.
A company considers the price charged by its competitors in a monopolistic competition as given, ignoring the impact for its own price levels on other firms ' prices. Monopoly competition will become a government-supported monopoly in the case of the authoritarian government.
