EDUCBA

EDUCBA

MENUMENU
  • Free Tutorials
  • Certification Courses
  • 250+ Courses All in One Bundle
  • Login

Monopolistic Competition Examples

By Madhuri ThakurMadhuri Thakur

Home » Finance » Blog » Accounting Fundamentals » Monopolistic Competition Examples

Monopolistic Competition Examples

Introduction to Monopolistic Competition Examples

In case of the monopolistic competition many of the firms compete with each other but at the same time sell the products which the distinct with that of the product of competitors in some way. Since in multiple areas monopolistic competition can be seen, all examples cannot be provided. So, some of the examples of monopolistic competition are given below showing the different situations.

Examples of Monopolistic Competition

Below are the Examples of Monopolistic Competition:

Start Your Free Investment Banking Course

Download Corporate Valuation, Investment Banking, Accounting, CFA Calculator & others

Example 1 – Fast Food Company 

The Fast Food companies like the McDonald and Burger King who sells the burger in the market are the most common type of example of monopolistic competition. The two companies mentioned above sell an almost similar type of products but are not the substitute of each other. Now which product the particular consumer likes the most and of which company totally depends on him. Apart from the burger, other products are also sold by these companies like French fries soft drinks, etc. All these products of the mentioned companies are of similar nature but there is no congruency between the products sold by the two as each one has a slightly different shape and taste. This is the monopolistic structure.

Example 2 – Hairdresser 

The service provided by the hairdressers in the market provides one of the most famous types of the example of the monopolistic competition. There are certainly lots of hairdressers and each of the hairdressers has a slightly different type of skill and thus each one of them sells a slightly differentiated product to the consumer in the market. Also, they have different premises situated in a different location where they provide the services. These things differentiate the product in the eyes of the consumers. The hairdresser service is not the big chain industry and thus keeps them away from the more oligopolistic market structure.

The prices offered by the hairdresser will depend on the services offered by them and its uniqueness. If the particular hairdresser is known for providing the best services in the particular market then it can increase the prices of its services as they know that consumers can pay slightly more amount of money for their superior services. The uniqueness gives the power to charge more amounts. Thus it is the service that gives reputation to the firms for the quality they are offering. Also relatively there is a low barrier for exit and entry for setting up a new hairdresser shop which is one of the important features of the monopolistic structure.

Example 3 – Bakery Shop 

There are certainly a lot of bakeries in any town and each one of them sells a slightly differentiated product to the consumer in the market. But if in a particular area of the town there exists only one bakery, then it can demand a slightly higher amount of price for its products. The firms under monopolistic competition with their ability can gain a greater degree of market share due to which it can increase the prices of its products.

Apart from the above if any particular bakery is known for providing the best pasties and pies in the town then it can increase the prices for their pasties and pies as they know that consumers can pay slightly more amount of money for their superior product. This is the establishment of brand name and loyalty. Also relatively there is a low barrier for exit and entry for setting up a new bakery shop which is one of the important features of the monopolistic structure.

Popular Course in this category
All in One Financial Analyst Bundle (250+ Courses, 40+ Projects)250+ Online Courses | 1000+ Hours | Verifiable Certificates | Lifetime Access
4.9 (3,296 ratings)
Course Price

View Course

Related Courses
Finance for Non Finance Managers Course (7 Courses)Cost Accounting Course (5 Courses)US GAAP Course (29 Courses with 2020 Updated)

Example 4 – Running Shoes Market 

There are a number of brands if one is searching for running shoes like Adidas, ASICS Nike, etc. The market of the running shoes seems to be in full competition on the one hand as there are many brands present competing with each other as there are low barriers to entry and exit. However market of the running shoes seems to be under the monopolistic structure on the other hand because the uniqueness which each of the brands of shoe offers gives them the power to charge the price which is different from the other competitors. The companies can increase some of the features in their product and charge the consumer accordingly for the new feature. If the consumer finds the new feature worth for its price then he would buy it otherwise not.

Example 5 – Restaurants 

One can see that there are many restaurants in any town and each one of them competes on the quality of food and prices of the product offered in the market. In every area, it can be seen that some restaurant charges $ 50 for one product and for the same product another restaurant is charging $ 80. The price of the product of the restaurant depends on many of the factors such as the quality of the food, place of the restaurant, other services they are offering to the consumers, etc. This is the product differentiation among the different restaurants which is the key element of any business. These products offered are similar in nature but are not a substitute for each other. Also, there is a low barrier in setting up of new restaurant and exiting from it which is also an important feature of the monopolistic structure.

Conclusion – Monopolistic Competition Examples

Thus monopoly is the industry or the sector which combines the elements of both monopoly and the competitive markets. There is freedom to the players to enter and exit from the market along with offering the different product which has similarities but is not the substitute of each other. Therefore they can maintain the prices of the products or the services they are offering on their own. In the case of the industry or area where the monopolistic competition exists and there are super profits, then it will encourage the new firm to enter the market as there is the freedom of entry which in long run will lead to the normal profits. Thus the above-mentioned examples are some of the examples of monopolistic structure in the different industries. There are various other examples as well which shows that monopolistic competition exists in various different markets or areas.

Recommended Articles

This has been a guide to Monopolistic Competition Examples. Here we discussed the top 5 Monopolistic Competition Examples along with a detailed explanation. You can also go through our other suggested articles to learn more –

  1. Customer Acquisition Strategy | Examples | Process
  2. Monopoly vs Monopolistic Competition
  3. Monopoly vs Perfect Competition

All in One Financial Analyst Bundle (250+ Courses, 40+ Projects)

250+ Online Courses

1000+ Hours

Verifiable Certificates

Lifetime Access

Learn More

3 Shares
Share
Tweet
Share
Primary Sidebar
Finance Blog
  • Accounting fundamentals
    • Asset Account
    • Estate Tax
    • Excise Tax
    • Finance Lease
    • Financial Assets Examples
    • Flat Tax
    • Accounts Receivable - Debit or Credit
    • Anti Dilutive Securities
    • Quality of Earning
    • Utilities Expenses
    • Audit Report Contents
    • Budgetary Control
    • Callable Preferred Stock
    • Capital Expenditure
    • Capital Lease Criteria
    • Carrying Amount
    • Cash Flow Analysis
    • Deferred Tax Liabilities
    • Completed Contract Method
    • Earned Income
    • Explicit Cost
    • External Audit
    • Accrued Expense
    • Allowance for Doubtful Accounts
    • Depreciation Tax Shield
    • Accounts Receivable Financing
    • Audit Report Qualified Opinion
    • Audit Report
    • Audit Report Examples
    • Marginal Tax Rate
    • Marginal Tax Rate
    • Direct vs Indirect Cash Flow Methods
    • Salvage Value
    • Balance Sheet Analysis
    • Current Liabilities Examples
    • Debtor
    • Other Comprehensive Income
    • Period Costs
    • Inventories List
    • Marketable Securities in Balance Sheet
    • Gross Sales
    • Tax Haven
    • Interim Reporting
    • Date of Record of Dividends
    • Short Term Assets
    • Revenue Streams
    • Tax Planning
    • Accounts Receivable Journal Entry
    • Book Profit
    • Capital Budgeting Importance
    • Accounts Payable Cycle
    • Inventory Audit
    • Estimated Tax
    • Dividend Declared
    • SG & A Expenses
    • Tax Lien
    • Excise Tax Examples
    • Accelerated Share Repurchase
    • Accounting Ethics
    • Accounts Payable Credit or Debit
    • Accounting for Fair Value Hedges
    • Long Term Debt in Balance Sheet
    • Assets Example
    • Audit Assertions
    • Accounts Receivable Process
    • List of Operating Expenses
    • Income Tax Accounting
    • Non-Operating Expenses
    • Unrealized Gains and Loses
    • Warranty Expense
    • What is Budgeting?
    • WIP Inventory
    • Current Liabilities
    • Zero Based Budgeting
    • Types of Liabilities on Balance Sheet
    • Marginal Costing vs Absorption Costing
    • Non-Current Liabilities Examples
    • Cash Equivalents
    • Types of Assets
    • Assets List
    • Deferred Income Tax
    • Working Capital Management Importance
    • Extraordinary Items
    • Deferred Tax
    • Long Term Liabilities
    • Perpetual Inventory System
    • Intangible Assets Examples
    • Goodwill
    • Working Capital Loan
    • Consolidated Financial Statement
    • Contingent Asset
    • Cash and Cash Equivalents
    • Fixed Assets
    • Current Asset
    • Financial Assets Types
    • Financial Assets
    • Wasting Asset
    • Write off
    • Objectives of Financial Statement Analysis
    • Earnout
    • Hire Purchase
    • Sublease
    • Off Balance Sheet
    • Liabilities Example
    • Leasehold
    • Off Balance Sheet Financing
    • Revolving Credit Facility
    • General Reserve
    • Accounting Information System
    • Accounting Transaction
    • Limitations of Financial Statement Analysis
    • 3 Types of Inventory
    • Cook the Books
    • Non Performing Assets
    • Revenue Reserve
    • Commitments and Contingencies
    • Conservatism Principle of Accounting
    • Money Measurement Concept
    • Materiality Concept
    • Types of Accounting
    • Types of Financial Statements
    • Balance Sheet Items
    • Components of Financial Statements
    • Cost Method
    • Related Party Transactions
    • Relevance in Accounting
    • Responsibility Accounting
    • Tragedy of the Commons
    • Accounts Receivable Aging
    • Accounting Scandals
    • Cost Benefit Principle
    • Accrual Accounting Examples
    • Fiscal Year
    • Financial Statement Limitations
    • Grey List
    • Objectives of Financial Statements
    • What are Accounting Principles?
    • Accounting Controls
    • Users of Financial Statements
    • Accounting Cycle
    • Accounting Estimates
    • Window Dressing in Accounting
    • What are Accounting Policies?
    • Fringe Benefits
    • Full Disclosure Principle
    • Financial Statement Examples
    • Sunk Cost
    • Accounts Receivable Turnover Ratio
    • Days in Inventory
    • Current Ratio vs Quick Ratio
    • Investment Banking vs Private Equity
    • Private Equity vs Hedge Fund
    • Accounting Ratios
    • Shell Corporation
    • Cost Accounting Career
    • Funds from Operations
    • Accounting Career
    • Actuaries Career
    • General Ledger Accounting
    • Forensic Accounting Career
    • Auditing Career
    • Budgeting Career
    • Gross Profit Ratio
    • Management Accounting Career
    • Cycle Counting
    • Going Concern Concept
    • Debit Note vs Credit Note
    • EBIT vs Net Income
    • EBIT vs Operating Income
    • EBITDA vs Net Income
    • EBITDA vs Operating Income
    • GAPP vs Non-GAAP
    • Finance vs Lease
    • Gross sales vs Net sales
    • Income Tax vs Payroll Tax
    • Mortgage Banker vs Broker
    • Revenue vs Net Income
    • Shareholder vs Stakeholder
    • Stock Option vs RSU
    • Full Form of FYI
    • Return on Invested Capital
    • Transaction Exposure
    • LLC vs Partnership
    • Replacement Cost
    • Unit Contribution Margin
    • Accounts Payable vs Notes Payable
    • CA vs CS
    • Capitalizing vs Expensing
    • CPA vs CA
    • Trial Balance vs Balance Sheet
    • CA vs MBA
    • Merger Accounting
    • Cash Management
    • Sole Proprietorship vs LLC
    • Manufacturing Overhead
    • Asset Retirement Obligation
    • Temporary Account
    • Leveraged Lease
    • Predetermined Overhead Rate
    • Drag-Along Rights
    • Special Journal
    • Interest vs Dividend
    • Direct Materials
    • Accounting Method
    • Return on Sales
    • Calendar Year vs Fiscal Year
    • Contribution Margin Income Statement
    • Activity Based Budgeting
    • Common Size Income Statement
    • Capital Lease vs Operating Lease
    • Insolvency vs Bankruptcy
    • Vertical Analysis of Income Statement
    • Debt vs Equity Financing
    • Adjusted EBITDA
    • LLC vs Inc
    • Return on Average Capital Employed
    • Stocks vs Real Estate
    • Return on Equity
    • Return on Capital Employed
    • Diluted Earnings Per Share
    • Limited Partner vs General Partner
    • Basic EPS
    • Cash Flow Return on Investment
    • Fixed vs Variable
    • Public Company vs Private Company
    • Market Order vs Limit Order
    • Return on Total Assets
    • Hard Cost vs Soft Cost
    • Return on Average Assets
    • Ethereum vs Ethereum Classic
    • Capital Employed
    • Gross Profit Percentage
    • OIBDA
    • Average Collection Period
    • Profit Margin
    • EBITDA Margin
    • Working Capital Turnover Ratio
    • Marginal vs Effective Tax Rate
    • CFO vs Controller
    • Accounting Interview Questions
    • EBITDA
    • Asymmetric Information
    • Days Payable Outstanding
    • Journal Examples
    • Debit vs Credit
    • Lease vs Rent
    • Buying vs Leasing
    • Finance Job From Engineering
    • Days Inventory Outstanding
    • Horizontal Integration Example
    • Revenue Expenditure
    • Accounts Payable Turnover Ratio
    • Statement of Cash Flows
    • Days Sales Uncollected
    • Days Sales Outstanding
    • Statement of Income Example
    • Unadjusted Trial Balance
    • Red Herring Example
    • Revenue vs Turnover
    • Functions of Financial Market
    • Cost of Goods Sold Example
    • Operating Ratio
    • Stock Turnover Ratio
    • Bill of Sale Examples
    • Break Even Analysis Example
    • Financial Analysis Example
    • Statement of Retained Earnings Example
    • Equity Ratio
    • Long Term Liabilities Example
    • Defensive Interval Ratio
    • Operating Expense Example
    • Solvency Ratio
    • Capital Adequacy Ratio
    • Cash Flow From Operations Ratio
    • Working Capital Example
    • Cash Reserve Ratio
    • Quick Ratio
    • Loan Sharks
    • Fixed Asset Examples
    • Partnership Example
    • Standard Deviation Examples
    • Accounting vs CPA
    • Period Cost vs Product Cost
    • Cash Ratio
    • Investment vs Speculation
    • Annuity vs Lump Sum
    • Bank Draft vs Certified Cheque
    • Bidding vs Auction
    • Better in Business and Finance
    • Direct Tax vs Indirect Tax
    • Financial Ratio Analysis Technique
    • EPS and Diluted EPS
    • Stocks vs Bonds
    • IFRS Vs US GAAP
    • Finance Degree Career Options
    • Tax Slabs & Rates
    • Lease vs Buy
    • Interest Rate vs Annual Percentage Rate
    • Long Term vs Short Term Capital Gains
    • Memorandum of Association vs Article of Association
    • Large Cap vs Small Cap
    • CPA vs CMA
    • Assets vs Liabilities
    • Revenue vs Income
    • Bookkeeping vs Accounting
    • Financial Lease vs Operating Lease
    • EBIT vs EBITDA
    • Revenue vs Sales
    • Common stock vs Preferred stock
    • US GAAP vs IFRS
    • Current Account vs Capital Account
    • IFRS in India
    • Finance vs Economics
    • ACCA vs CIMA
    • Current Assets vs Non Current Assets
    • Economic Examples
    • Investment vs savings
    • Active vs Passive Investing
    • Financial Accounting vs Management Accounting
    • Revenue vs Earnings
    • Trade Discount vs Cash Discount
    • Limited Liability Company
    • Finance for Non Finance Professionals
    • Costs vs Expenses
    • Chapter 11 vs Chapter 13
    • Why Financial Analytics
    • Accounting vs Financial Management
    • ACA vs ACCA
    • ACCA vs CPA
    • Budget vs Forecast
    • Positive Economics vs Normative Economics
    • CA vs ACCA
    • Stakeholders Example
    • Stock vs Options
    • Liquidity vs Solvency
    • Stock vs Equities
    • Franchising vs Licensing
    • GDP vs GNP
    • Inflation vs Deflation
    • Economic Growth vs Economic Development
    • Direct cost vs Indirect Cost
    • Accrual Accounting vs Cash Accounting
    • FCFF vs FCFE
    • Public vs Private Accounting
    • Capex vs Opex
    • BSE vs NSE
    • Loans vs Advances
    • Discount Rate vs Interest Rate
    • ROIC vs ROCE
    • Percentage Of Completion Method
    • 10K vs 10Q
    • Shares Outstanding vs Float
    • Contribution Margin vs Gross Margin
    • Short Term vs Long Term Capital Gains
    • General Journal vs General Ledger
    • Outsourcing vs Offshoring
    • Depreciation vs Amortization
    • Liability vs Debt
    • Asset Purchase vs Stock Purchase
    • Accrual vs Provision
    • Actuary vs Accountant
    • Stock vs Inventory
    • Liability vs Expense
    • Dividends EX-Date vs Record Date
    • Bid Price vs Ask Price
    • Dividend vs Growth
    • Time vs Money
    • IRA vs 401 (k)
    • Corporation vs LLC
    • CEO vs President
    • Margin vs Markup
    • Leasehold vs Freehold
    • Lending vs Borrowing
    • Non-Profit vs Not For Profit
    • Corporation vs Incorporation
    • CFO vs CEO
    • Purchase vs Procurement
    • Deficit vs Debt
    • Internal Audit Vs External Audit
    • C Corp vs S Corp
    • Absolute Advantage vs Comparative Advantage
    • Tangible vs Intangible
    • Executive Director vs Managing Director
    • Company vs Firm
    • Insurance vs Assurance
    • Expense vs Expenditure
    • Hard Money vs Soft Money
    • Entrepreneurship vs Management
    • Loan vs Mortgage
    • Fair Value vs Market Value
    • Chief Executive Officer vs Managing Director
    • Manufacturing vs Production
    • Random Error vs Systematic Error
    • 401(K) vs Roth IRA
    • 403(b) vs 457
    • Adjusting Entries
    • Equity vs Commodity
    • Turnover vs Profit
    • Effective Interest Rate
    • Working Capital Ratio
    • Margin vs Profit
    • Loan vs Lease
    • Shares vs Debentures
    • Equity vs Fixed Income
    • Market Equilibrium
    • Economics vs Business
    • Secured vs Unsecured Credit Card
    • Profitability vs Liquidity
    • Z score vs T score
    • Equity vs Asset
    • Geometric Mean vs Arithmetic Mean
    • Cost vs Price
    • Industry vs Sector
    • ShortSale vs Foreclosure
    • Revenue vs Profit
    • Real Interest Rate
    • Account Payable vs Accrued Expense
    • Day Trading vs Swing Trading
    • Indirect Costs
    • Graphs vs Charts
    • Issued Shares vs Outstanding Shares
    • Creditor vs Debtor
    • Annuity vs IRA
    • Pension vs Annuity
    • Debt Consolidation vs Bankruptcy
    • Equity vs Shares
    • Economic Utility
    • Average vs Weighted Average
    • Operating Profit vs Net Profit
    • Purpose of Income Statement
    • NASDAQ vs Dow Jones
    • Direct Method of Cash Flow Statement
    • Real GDP
    • Derivatives Example
    • Nominal GDP
    • Generally Accepted Accounting Principles
    • Cost of Sales vs Cost of Goods Sold
    • Historical Value vs Fair Value
    • General Ledger vs Trial Balance
    • Actual Cash Value vs Replacement Cost
    • Job Costing vs Process Costing
    • Standard Cost vs Actual Cost
    • 401k vs Annuity
    • FIFO vs LIFO
    • Bid Price vs Offer Price
    • Sole Proprietorship vs Partnership
    • Equity Shares vs Preference Shares
    • Debt vs Equity
    • Cost Accounting vs Financial Accounting
    • Coupon vs Yield
    • Career in Finance
    • Gross Salary vs Net Salary
    • Tax Credit vs Tax Deduction
    • Variance vs Standard Deviation
    • What is Disposable Income
    • Liabilities in Accounting
    • Chapter 7 vs Chapter 11
    • Budgeting Examples
    • Fixed Costs Example
    • Joint Venture Example
    • Quantitative Research Example
    • Bootstrapping Examples
    • Monopoly Examples
    • Monopolistic Competition Examples
    • Risk Assessment Example
    • Inflation Accounting
    • Defined Benefit Plan
    • Variable Costing Example
    • Acquisition Examples
    • Cognitive Dissonance Example
    • Opportunity Costs Examples
    • Globalization Example
    • Histogram Examples
    • Mean Example
    • Trial Balance Example
    • Command Economy Examples
    • Sunk Cost Examples
    • Compounding Example
    • Compound Interest Example
    • Profit vs Income
    • Joint Venture vs Partnership
    • Comparative Advantage Example
    • Bank Reconciliation Example
    • Competitive Advantage Example
    • Accrual vs Deferral
  • Asset Management Tutorial (140+)
  • Banking (43+)
  • Corporate Finance Basics (126+)
  • Credit Research Fundamentals (6+)
  • Economics (44+)
  • Finance Formula (372+)
  • Financial Modeling in Excel (13+)
  • Investment Banking Basics (60+)
  • Investment Banking Careers (26+)
  • Trading for dummies (66+)
  • valuation basics (25+)
Finance Blog Courses
  • Finance for Non Finance Managers Certification
  • Cost Accounting Course
  • US GAAP Course
Footer
About Us
  • Blog
  • Who is EDUCBA?
  • Sign Up
  • Corporate Training
  • Certificate from Top Institutions
  • Contact Us
  • Verifiable Certificate
  • Reviews
  • Terms and Conditions
  • Privacy Policy
  •  
Apps
  • iPhone & iPad
  • Android
Resources
  • Free Courses
  • Investment Banking Jobs Offer
  • Finance Formula
  • All Tutorials
Certification Courses
  • All Courses
  • Financial Analyst All in One Bundle
  • Investment Banking Training
  • Financial Modeling Course
  • Equity Research Course
  • Private Equity Training Course
  • Business Valuation Course
  • Mergers and Acquisitions Course

© 2020 - EDUCBA. ALL RIGHTS RESERVED. THE CERTIFICATION NAMES ARE THE TRADEMARKS OF THEIR RESPECTIVE OWNERS.

EDUCBA Login

Forgot Password?

EDUCBA
Free Investment Banking Course

Corporate Valuation, Investment Banking, Accounting, CFA Calculator & others

*Please provide your correct email id. Login details for this Free course will be emailed to you
Book Your One Instructor : One Learner Free Class

Let’s Get Started

This website or its third-party tools use cookies, which are necessary to its functioning and required to achieve the purposes illustrated in the cookie policy. By closing this banner, scrolling this page, clicking a link or continuing to browse otherwise, you agree to our Privacy Policy

EDUCBA

*Please provide your correct email id. Login details for this Free course will be emailed to you
EDUCBA
Free Investment Banking Course

Corporate Valuation, Investment Banking, Accounting, CFA Calculator & others

*Please provide your correct email id. Login details for this Free course will be emailed to you

Special Offer - All in One Financial Analyst Bundle (250+ Courses, 40+ Projects) Learn More