Question

Discuss the key characteristics of a monopolistically competitive industry.

Short answer

Monopoly really does have four distinct features:

1. A single firm that sells all of an industry's output,
2. Entry and Exit is a one-of-a-kind product.
3. exit restrictions, and, more often than not,
4. Specialized data about manufacturing techniques that the other prospective producers do not have.

Step-by-step solution

Introduction.

• A market where numerous firms supply comparable (but not optimal) replacements for their services and commodities is described as price discrimination.
• In a monopolistic competitive market, entrance and exit barriers are minimal, and one institution's policies have little impact on many of its own competitors.

Explanation.

Monopolistically market markets have the following elements: there's many producers and consumers, and no company has full influence on market price.

Key characteristics of a monopolistically competitive industry. 

Non-price differences among both competitors' products are perceived.

• There are numerous manufacturers and purchasers.
• Products with minor variations.
• The entry and exit barriers are low.
• There is the chance of supernormal profits in the temporary.