Respuesta :
Entry of new firms into monopolistically competitive industries is relatively easy because capital requirements are low.
What are monopolistically competitive industries?
- Low entry barriers
In monopolistically competitive industries, numerous businesses can enter the market and fight with one another for market share. This prevents one company from controlling the entire industry. Companies don't have to think about how their choices will affect rivals, allowing them to operate without worrying about intensifying rivalry.
- Differentiation of Products
Similar items from monopolistically competitive industries are differentiated by their unique marketing approaches, brand names, and levels of quality.
- Pricing
In monopolistically competitive industries, businesses set pricing for both goods and services. The monopolistic competition allows businesses to change prices without starting a price war, which is common in oligopolies.
- Supply Elasticity
In monopolistically competitive industries, demand is very elastic and responsive to price fluctuations.
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