In what way is monopolistic competition superior to perfect competition?

Question

Quizplus · Accepted Answer

Monopolistic competition is superior to perfect competition in that consumers benefit from having differentiated products instead of identical products. In perfect competition, all firms produce identical products, which can result in a lack of variety and limited choice for consumers. In monopolistic competition, firms differentiate their products in order to capture a share of the market, leading to greater choice and satisfaction for consumers.

In What Way Is Monopolistic Competition Superior to Perfect Competition