Answer
1. There are numerous sellers
2. Each seller has a product that is slightly different than that offered by the competition
3. Low barriers of entry to the market
Characteristics 1 and 3 are similar to perfect competition. In addition, perfectly competitively firms and monopolistically competitive firms both make 0 profit in the long run.
Characteristic 2 is similar to monopolies in that a monopoly has no competition that sells the same product. This is why both monopolies and monopolistically competitive firms have downward sloping demand curves.
Work Step by Step
Not applicable.
