State with reason whether you agree or disagree : There are many features of monopolistic competition.

Answer: I agree with the statement.

Reasons: Monopolistic competition is a market with many sellers selling differentiated products. It has the following features:

1. Large number of sellers: Each has a small share of the market and some control over price.
2. Product differentiation: Products are close but not perfect substitutes, differing in brand, packing, colour and design, e.g. soaps and toothpastes.
3. Freedom of entry and exit: New firms can enter and existing ones can leave.
4. Selling costs: Firms spend heavily on advertisement and sales promotion.
5. Group concept: Instead of an industry, there is a group of firms producing similar products.
6. Imperfect knowledge: Buyers do not have full knowledge of products and prices.
7. Non-price competition: Firms compete through quality, gifts, after-sales service and offers rather than price.

Thus monopolistic competition combines features of both monopoly and perfect competition.