MARKET

STRUCTURE:
MONOPOLISTI
C
De Castro, Esther R.
COMPETITION ABM A
LESSON
Previously, we have discussed one of the market
structures which is very
typical in the Philippine market – the perfect
competition. Sari-sari store and other micro and
small businesses are present in the perfect
competition. For today’s
topic, we will discuss another market structure
which is monopolistic competition. This market
structure is part of the imperfectly competitive
market. An imperfect
market is one in which individual buyers and sellers
can influence prices and
production, where there is no full disclosure of
information about products and
prices, and where there are high barriers to entry or
exit in the market (Kenton,
2020).
Monopolistic Competition

Monopolistic competition is characterized as an

industry in which many
firms offer products or services that are similar,
but not exactly alike –
differentiated in nature. As consumers, we
want to have varieties of products to
choose from. We have the choice to buy the
product in terms of the quality,
features, packaging, and even because of its
brand name.
CHARACTERISTIC
S OF
MONOPOLISTIC
COMPETITION
1. It is a blend of perfect competition
and monopoly. Just like perfect
competition,
there are many similar products
available in the market and there are
many large
companies which they can influence the
price by creating a product identity.
2. The firms sell differentiated products which are highly substitutable
but are not
perfect substitutes. Products are not identical, but very similar, so
companies use
product differentiation. Let say, shampoo products, there are many
variants of
shampoo to choose from like for hair straightening, anti-dandruff,
smooth and silky
hair. Product differentiation is a marketing strategy that strives to
distinguish a
company's products or services from the competition (Kopp, 2020). The
product
differentiation may be in color, packaging, store location, store design,
store
decorations, delivery, service, or anything to make the product stand
out. Brand
identity is one of the selling point of the firms in a monopolistic
competition.
3. There are free entry
and exit in the market
that enables the
existence of many
sellers.
4. The firms are engaged in non-
price competition. This involves
the advertising of
a product’s appearance, quality,
or design which takes to shift the
demand curve to
the right without sacrificing the
prices.
5. It is similar to a
monopoly in which the
firm can determine the
quantity of the
products and has some
price control.
 VIDEO RELATED
FROM YOUTUBE

LINK: https://www.youtube.com/watch?v=8a3g
XThQeK0