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Monopolistic competition is a form of economic competition in which there are many producers and many consumers in a given market, consumers have clearly defined preferences, the goods and services are heterogeneous, and there is freedom of entry. It harbors some characteristics of monopoly as well as some of perfect competition. A monopoly is defined as a persistent market situation where there is only one provider of a kind of product or service. Monopolies are …

…rules and regulations, start-up cost, or any other barriers to entry. While some other firms bring upon high start-up cost or need government permits to enter an industry, this is not the case for monopolistically competitive firms. Likewise, a monopolistically competitive firm is not prevented from leaving an industry. Most important, monopolistically competitive firms can get whatever labor, capital, and other resources that they need with ease. There is no racial, ethnic, or sexual discrimination.