What difference does it make to the market when we say that there are differentiated products in monopolistic competition?

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What difference does it make to the market when we say that there are differentiated products in monopolistic competition?

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Answer:

Product differentiation is the means used by a firm in a monopolistic competitive market with many firms selling similar products to differentiate its product from that of other firms.

Explanation:

Product differentiation can be real or fancied. It is real when there are slight differences in the product of the firm as in taste if it is a foodstuff, or in quality etc. It is fancied if the difference is just to attract the customer and not real differentiation, for example, differences in packaging, design etc. Firms in such markets engage in active advertising to attract customers and to market their products.

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Long run profits made by Firms under monopolistic competition and perfect competition are same or different?

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What difference does it make to the market when we say that there are differentiated products in monopolistic competition? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about What difference does it make to the market when we say that there are differentiated products in monopolistic competition? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What difference does it make to the market when we say that there are differentiated products in monopolistic competition?.

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