Monopolistic Competition
Plain definition
A market with many sellers offering differentiated products and easy entry — combining monopoly-like pricing power with competition-like free entry.
In economics
Each firm faces a downward-sloping demand curve for its unique variety, so it sets price above marginal cost in the short run. But free entry lets rivals copy successful varieties, shifting each firm's demand left until price equals ATC and only normal profit remains — the long-run outcome resembles perfect competition, minus the efficiency.
Example
Restaurants, coffee shops, and clothing brands are classic examples: many sellers, distinct products, and new entrants constantly arriving.
Monopolistic competition is confused with oligopoly. Both involve differentiated products, but monopolistic competition has many firms and free entry (no strategic interdependence), while oligopoly has few firms that must anticipate rivals. It is also not a 'mix' of the other two — it is its own structure.