monopolistic competition

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A market for a particular product or service in which there are many competing sellers offering similar but non-identical goods. Such a market resembles perfect competition in that there are a multiplicity of buyers and sellers and few barriers to entry. However, because each specific good can only be obtained from one seller, the producer acquires a power to influence market prices that would not exist under perfect competition: it has, in effect, a monopoly in its own product. In such a market product differentiation becomes essential, and branding, advertising, and marketing will be crucial to a firm's success.

Subjects: Business and Management — Economics.

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