These costs constitute a substantial part of the total cost under monopolistic competition. People don’t know who is selling the good the cheapest or who has the best quality.
Sometimes a higher priced product is preferred even though it is of inferior quality.
In the real world, no market is purely monopolistic or perfectly competitive.
Every real-world market combines elements of both of these ideal types.
The distinction between oligopolistic competition and monopolistic competition seems obvious, but this is not necessarily the case.
More or less: The main difference between oligopolistic competition and monopolistic competition is that the relative size and market power of each company is based on the number of competitors in the market.
In contrast, many small companies are participating in monopolistic competition.
Oligopolies are usually considered to consist of 2 to 20 companies. There is no exact number of companies to distinguish between oligopolistic competition and oligopolistic competition.
Even though normal profits are break-even, it includes profits for the entrepreneur for taking on risk.
Even though there is allocative inefficiency (where Price exceeds Marginal Cost) in monopolistic competition, there is a greater variety of products for the customer to select.