I still do not quite understand the clear differences between these 2 market structures, particularly in the aspect of Nature of substitute products.
Referring to SN pg94, monopolistic competition has good substitutes but differentiated , whereas oligopoly has VERY good substitutes or differentiated.
What is the reason for oligopoly having better subsitutes than monopolistic, since monopolistic has lower barrier of entry?
In notes, they use example of toothpastes with many brands for monopolistic competition, and automobile market for oligopoly. I don’t understand why automobiles have better subtitutes compared with toothpastes, as I thought consumers’ perceived difference for automobiles should be higher than cheaper products such as toothpastes.
Thank you! 