What is a monopolistic competitive?

Answer 1

== == Monopolistic competition is the market situation where many sellers provide similar yet not perfectly substitutable products, thereby giving each seller some monopoly power. Thus, in monopolistic competition production does not take place at the lowest possible cost. Examples of monopolistic competition include restaurants, books, clothing. See the link below for more information. Monopolies are unfair, big bullies on the playground of business. Say we both were in the same industry, but I had more money than you did. I wanted to get your customers away from you so that I could make even more money. One way I might do that is to drop my prices so low that you can't afford to lower your prices to equal mine. All of your customers come to me to save money. You go out of business. I raise my prices back to normal--or even higher now because you're not there as my competition anymore. I keep doing this to everyone in our industry until I'm the only choice around, and everyone has to pay whatever I want to charge. Monopolies were a huge problem in the late 19th century in the U.S., and many would argue certain companies around today have too much of a monopoly on an industry.