A monopolistically competitive firm can increase its price without losing all its market share because of product differentiation.

Question

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In monopolistic competition, firms produce differentiated products, which means that they have some market power and can increase their price without losing all of their market share. However, the degree to which they can do this depends on the substitutability of their product and the availability of close alternatives.

A Monopolistically Competitive Firm Can Increase Its Price Without Losing