88.0k views
5 votes
In monopolistic competition, what effect do price variations generally have on the market as a whole?

User KitsuneYMG
by
8.5k points

1 Answer

2 votes
Little. Monopolistic competition refers to the product differentiation by different producers and sellers, and do not aim to substitute other products. In monopolistic competition, a company uses the prices charged by its rivals as given and ignores the impact of its own prices on the prices of other firms.
User Jgp
by
8.0k points