A profit-maximizing firm in a ________ market structure behaves much like a monopolistic firm in the short run.

Question

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In a monopolistically competitive market, firms have some degree of market power due to product differentiation, similar to a monopolistic firm. This allows them to behave in a way that is not purely competitive, setting prices above marginal cost in the short run, much like a monopolist.

A Profit-Maximizing Firm in a ________ Market Structure Behaves Much