Economics Monopolistic Competition Questions Medium
Monopolistic competition does not typically result in price leadership. Price leadership is a concept that is more commonly associated with oligopoly markets, where a few dominant firms set the prices and other firms in the market follow suit. In monopolistic competition, there are many firms operating in the market, each offering slightly differentiated products. As a result, each firm has some degree of market power, but not enough to dictate prices to other firms. Instead, firms in monopolistic competition tend to engage in non-price competition, such as advertising, product differentiation, and branding, to attract customers. Therefore, monopolistic competition does not have a significant impact on price leadership.