A market in which there are large numbers of sellers of a particular product, but each seller sells somewhat differentiated but close products is termed as

A market structure characterized by a large number of sellers offering differentiated but close products is termed monopolistic competition. Unlike perfect competition, where firms sell identical (homogeneous) products and act as price takers [1], monopolistic competition involves product differentiation through branding, quality, or features. This differentiation allows each firm to have some degree of market power over its price, as its product is not a perfect substitute for others. However, because there are many sellers and products are closely related, competition remains intense. In contrast, a monopoly features a single seller with no close substitutes, and an oligopoly consists of a few large firms that are highly interdependent. Monopolistic competition thus combines elements of both monopoly (product uniqueness) and competition (many sellers).

Sources

1. [1] Microeconomics (NCERT class XII 2025 ed.) > Chapter 4: The Theory of the Firm under Perfect Competition > 4.1 PERFECT COMPETITION: DEFINING FEATURES > p. 53