1. Monopolistic competition is a market situation where there is a large numberof buyers and sellers selling closely related goods but surely not homogeneous. 

For example, take the case of tooth-paste, most commonly used commodity. There are qiany tooth pastes in the market, such as Colgate, Cibaca, Close-up, Pepsodent, etc. These are all closely related goods but there may be difference in quality, colour, size, taste etc. which separate them from one another. Each producer has a monopoly control over his own product but competition exists between them. Thus, we find a combination of monopoly and competitive elements. Similarly, we can take another example of toilet soap. There is a large number of firms producing different brands or varieties of soap, e.g. Hamam; Pears, Lifebuoy, Lux, Nirma etc. Each firm enjoys monopoly over its brand. For instance, Hindustan Lever Ltd. has monopoly over the trademark Lux. But there is a competition among these firms producing soap. Similarly, markets of so many products like tea, shoes, shampoo, watches, clothes, fans, bulbs, T.V. sets, pens, sewing machines, washing machines, etc. are example of monopolistic competition.

2. Two Features of monopolistic market: 

1. Non-price competition: Non-price competition is an essential part of monopolistic competition. Firms under this compete with each other not merely by price cutting, but also on the basis of non-price competition, i.e., by producing differentiated products. 

2. Free entry and exit: There are no restrictions on the entry of the new . firms. There is freedom of entry in the sense that the new firms are free to produce close substitutes of any brand of product.

Two dissimilarities between perfect and Monopolistic competition:

Two similarities between Perfect and Monopolistic Competition

1. Large number of buyers and sellers. 

2. Perfect mobility of factors of production.