How do industries under monopolistic competition compare to those in pure competition?

In industries characterized by monopolistic competition, the key distinguishing feature is that they have weak or non-existent barriers to entry. This means new firms can easily enter the market if they see potential for profit. This contrasts with pure competition, where the philosophy is similar, as there are also no significant barriers preventing new entrants.

In terms of product differentiation, monopolistic competition typically features products that are similar but not identical, meaning firms can exercise some degree of market power through branding and consumer preference. On the other hand, pure competition is characterized by identical products across firms, which means no single firm has significant market power, and the prices are determined entirely by supply and demand.

This contrast in product differentiation and market power, along with the accessibility for new firms to enter the market, emphasizes why the scenario of weak or non-existent barriers to entry accurately describes both industries.