Monopolistically competitive firms prevent the efficient use of resources because in long-run equilibrium,

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In monopolistic competition, firms have some power to set prices above marginal cost due to product differentiation, leading to an inefficient allocation of resources. This is because the price charged is higher than the marginal cost of production, which is a deviation from perfect competition where price equals marginal cost in long-run equilibrium.

Monopolistically Competitive Firms Prevent the Efficient Use of Resources Because