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Market situation in which many independent buyers and sellers may exist but competition is limited by specific market conditions. The theory was developed almost simultaneously by Edward Hastings Chamberlin in his Theory of Monopolistic Competition (1933) and Joan V. Robinson in her Economics of Imperfect Competition (1933). It assumes product differentiation, a situation in which each seller's goods have some unique properties, thereby giving the seller some monopoly power. See alsomonopoly; oligopoly.
This entry comes from Encyclopædia Britannica Concise. For the full entry on monopolistic competition, visit Britannica.com.
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