How does economic rivalry take place in monopolistic competition? Describe the different aspects of product differentiation and price competition

Question

What will be an ideal response?

Answer 1

Non prime competition is the typical type of economic rivalry that occurs in monopolistic competition. There are several forms of non prime competition. First, firms may compete by offering consumers different product features or by providing products of varying quality. Second, firms differ in the amount of service or support they provide the consumer. Third, in some monopolistic industries such as restaurants or banking, location becomes a critical factor on which firms compete. Fourth, advertising and packaging build loyalty to a particular brand or make one product more appealing to the consumer. Although monopolistic competitors have some degree of control over price, the non price competition can be of even greater importance in influencing or meeting consumer tastes and preferences.