Monopolistic Competition
An industry structure with a relatively few large firms, each with some market power to set prices.
Monopolistic competition falls somewhere in-between perfect competition and monopoly. With perfect competition, all firms are small relative to the size of the market and are price-takers, i.e. they cannot influence the market price. In a monopoly, there is one dominant firm that sets the market price. With monopolistic competition, there are a few firms that have some influence on the price of their product but have to, nonetheless, take into account the prices of the other firms in the industry.
Monopolistic competition falls somewhere in-between perfect competition and monopoly. With perfect competition, all firms are small relative to the size of the market and are price-takers, i.e. they cannot influence the market price. In a monopoly, there is one dominant firm that sets the market price. With monopolistic competition, there are a few firms that have some influence on the price of their product but have to, nonetheless, take into account the prices of the other firms in the industry.