Monopolistically competitive firms resemble monopolies in that both produce at a lower quantity than a perfectly competitive firm.

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Monopolistically competitive firms, like monopolies, have some degree of market power that allows them to produce at a lower quantity and charge a higher price than would be the case in perfect competition, where firms are price takers and produce at the point where price equals marginal cost.

Monopolistically Competitive Firms Resemble Monopolies in That Both Produce at a Lower