Monopolistic competition is characterized by what form of competition among suppliers?

Monopolistic competition is characterized by competition among suppliers that focuses on brand and product features. This market structure allows firms to differentiate their products from those of their competitors through various means, such as unique features, brand image, and quality. The significance of this differentiation is that it allows companies to maintain some degree of pricing power, meaning they are not just competing on price alone.

Within monopolistic competition, firms strive to create a unique position in the minds of consumers, which can lead to brand loyalty. This form of competition is essential for businesses operating in such a market because it enables them to cater to varied consumer preferences and needs, thus allowing them to stand out amidst a crowded market with many similar products. As a result, firms often invest in advertising and marketing to promote their distinct features and brands, reinforcing the importance of differentiation in this competitive landscape.