Because they are the sole providers of a certain commodity or service, monopolies have downward-sloping market demand curves, which are referred to as the monopolist's demand curve. The market power of a company is determined by the form of its demand curve.
What features define monopolistic competition?
- Perfect competitors produce at the lowest point on their ATC, in contrast to monopolistic competitors that do not.
- Long-term profitability aside, monopolistic companies charge more and create less-than-ideal competition.
What similarities do monopolistic and perfect competition share?
- Perfect competition and monopoly market structures' traits are both present in monopolistic competition.
- Companies have pricing management and pricing strategies in place because they sell products that vary in quality, quantity, and other characteristics.
- It is easy to enter and depart the sector since there are fewer restrictions to doing so.
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