Among the many types of markets Monopolistic competitive market is the most widely used type of market or industry today. In this type of market, companies produce products that are similar but have different features, benefits and prices so that consumers can choose according to their needs.

Knowing the types of monopolized markets can help you formulate the right operational strategy to make your product famous in the marketplace.

The meaning of a monopoly market

A monopoly market is a type of market in which companies produce relatively similar goods and services. but cannot be substituted As a result, a company has its own market share. In English, this type of market is called monopoly competition.

Market makers in monopolistic competition tend to differentiate their products from one another by making prices. production quality For example, for A and B shampoo manufacturers, Shampoo A is marketed as a premium product. While B shampoo is marketed as a generic product.

Characteristics of a monopoly market

Characteristics of a monopolistic competitive market are as follows:

1. New companies can enter easily

in this type of market It is easier for new producers to enter the industry than in monopoly markets. Since neither party will be harmed, however, they must also have sufficient resources and compelling innovations to attract potential customers.

2. There are product differences.

A key feature in a monopolistic competitive market is the existence of product differentiation. Although the usage is the same. Differentiation is achieved by differentiating brands, quality, marketing strategy and price.

3. The company can set the price.

In a competitive market with a monopoly, companies are still able to set prices. Although they cannot set prices arbitrarily like in monopolistic markets. The price policy set by the company in this market is not easy to cause a price war between competitors as in the past. oligopoly type market

4. Demand is flexible.

as mentioned above The demand curve in a market with monopolistic competition tends to be flexible. Because consumers have full power to switch to other products and companies. Or remain loyal to the old products and companies?

As a result, the competition among manufacturers in this market is quite high as well. This competition is not only competitive in terms of price, but also in terms of marketing, production and so on. In addition to competition, companies with a monopoly market need to innovate. seriously as well Because the right product innovation will attract the right consumers too.

An example of a monopoly market

A simple example is chicken satay. Indonesia therefore has a variety of chicken satay dishes. Three similar but different types of satay products are Madura satay, Ponorogo satay and ambal satay.

Not only the difference from origin All 3 side dishes are also different in terms of seasoning. Although both chickens are used, and both are grilled. The Madura satay condiment is made with peanut sauce or candle nut chili sauce. The taste is still quite sweet compared to other types of satay.

The Ponorogo satay condiment is made with a variety of soaked spices (dibacem). Also, the meat is not diced, but thinly sliced ​​like meat so that fat or lard can be placed on it. The taste of this satay is generally not as sweet as Madura satay.

Sate ambal is a type of chicken satay at Kebumen restaurants. Ambal satay seasoning is generally lighter and more watery. Similar to satay padang, chicken satay is also seasoned with boiled tempeh which is ground and mixed with spices. The taste is unique. not too sweet but not too spicy

Advantages and Disadvantages of a Monopoly Market


  1. The company can enter and exit more easily.This level of convenience varies depending on the products produced in a monopoly market. For example, a monopoly market with satay products is easier for new entrepreneurs to enter the market than a monopoly market with mobile phone products. or other sophisticated technology devices
  2. Consumers have many choices..Because there are so many choices. Consumers therefore need some time before deciding which product is right for them.
  3. The company has the ability to set prices.. In this case the price is not set by requirements and proposalsbut also the company’s pricing strategy.
  4. The manufactured products are of high quality.High competition encourages companies to continue to innovate and make new breakthroughs, resulting in high-quality products reaching consumers.


  1. high competitionTo some extent, this level of competition can lead to unhealthy competition.
  2. Poor spending potential for marketing and brandingOne of the fastest ways to attract consumers is through strong marketing and branding. Such strong marketing and branding can backfire on the company if the revenues coming in are out of balance with the expenses spent on marketing and branding. Or marketing and branding doesn’t come with the right product innovation. An example is the money-burning discount program run by many online marketplace companies.
  3. Possible misinformationAggressive and lack of attention to marketing can result in misinformation being conveyed to attract a large number of consumers.
  4. The need for research to target the right consumersA monopolistic market not only requires manufacturers to keep innovating, but also requires them to target the right consumers. certain groups of consumers

Difference Between Monopoly Market and Monopoly Market and Perfect Competitive Market

A monopolistic competitive market is a combination of perfect competitive markets (perfect match) and monopolies. The difference with a perfectly competitive market is that:

category Monopoly Monopoly perfect competitive market
product The same model but many specifications one of a kind very similar type
number of manufacturers lots of one lots of
number of consumers lots of lots of lots of
price policy Manufacturers can set prices, but there are some limitations. Manufacturers can set prices. Manufacturers cannot set prices.
elasticity of demand resilient inflexible perfect flexibility
new arrivals easy to enter not easy to get in easy to enter

The elasticity of demand refers to how consumers react to price changes. In a market with monopolistic competition Can increase the price just a bit. Consumers switched to competitors but stayed with the old company. Due to product quality or price (elastic) in a market that is completely competitive. can increase the price a bit Make consumers switch to competitors without thinking. (super flexible)temporary In a monopoly market, consumers cannot switch to competitors’ products. (not flexible).

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