Demand Elasticity: There is a wide range of demand for similar products in the market.In other words, there is extensive marketing of products and services in a monopolistic competition. Marketing: Due to high competition in the market, each firm will want to advertise its product or service so that it is known to consumers.Note that the firms will not necessarily be mobile, but they will bring about perfect competition, that will ensure that firms don't experience long-term supernormal profits. Minimal entry is an incentive for firms to enter the market hence increasing competition. Barriers to entry: When it comes to monopolistic competition, there are either minimal or no entry barriers.So, most of them end up buying products of poor quality at a higher price and vice versa. So, most of them are not in a position to identify a seller with quality brand products that have low prices. Perfect knowledge: Most consumers have little knowledge when it comes to differentiating quality brands and prices.It means that one single firm cannot influence the market price. Most firms are usually independent and with limited market share. The number of sellers: The manufacturing industries consist of various firms selling products that are closely related but are not similar.There is always something that will make consumers like a product or service from a specific firm. However, because of the products element differentiation, another firms product or service, cannot be a perfect substitute for another company. So, in most cases, you may find similar products from different firms.
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