Question

Explain in detail 5 characteristics features of monopolies

Answer 1

1. There is a large number of firms that are indulged in buying and selling of the product.
2. Under the monopolistic competition, the firms can enter or exit freely. The firms will enter when the existing firms are making super-normal profits.
3. Product differentiation is a situation in which the buyers of the product differentiate the product with other products.
4. Another feature of the monopolistic competition is that every firm tries to promote its product by different types of marketing strategies.
5. The buyers and sellers do not have perfect knowledge of the market.