Economics Monopolistic Competition Questions
Non-price competition in monopolistic competition refers to the competition between firms based on factors other than price, such as product differentiation, branding, advertising, and customer service. In this market structure, each firm produces a slightly differentiated product, which allows them to have some control over the price. However, since there are close substitutes available, firms engage in non-price competition to attract customers and create a unique brand image. This can be done through advertising campaigns, product innovation, packaging, after-sales services, and other marketing strategies. The goal of non-price competition is to differentiate the product and create a perceived value in the minds of consumers, leading to increased demand and market share for the firm.