Answer to Question #157022 in Microeconomics for Afreen

Question

From the 1990s to now, the market is changing from monopoly to monopolistic competition. Explain reasons for this change. 

Answer 1

In a monopoly, there is only one single producer who decides the quantity and price of the product. While in a monopolistic competition there are a large number of independent sellers and each firm has a relatively small market share hence no individual firm has any significant power over price.