Freedom of entry and exit of firms:
The other significant feature is the freedom of any firm to enter into the field and generate the commodity under its own brand name and any firm can go out of the field when so selected. There are no barriers as in the situation of monopoly.
Monopolistic competition pre-assumes that customers have specific preferences for specific varieties or brand of products. Therefore pricing is not the problem however product differentiation is the trouble and competition is not on prices although on products.
Therefore in monopolistic competition, the features of monopoly and perfect competition are partially represented.
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