An important similarity between a monopolistically competitive firm and a pure monopolist is that both

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Both a monopolistically competitive firm and a pure monopolist face demand curves that are less than perfectly elastic. In a monopolistically competitive market, the firm faces a downward-sloping demand curve due to differentiated products, while in a pure monopoly, the firm is the sole provider of a good or service, giving them control over the market and the ability to set prices above marginal cost. Both firms have some pricing power and are not price takers, unlike perfectly competitive firms. However, it is not true that both realize an economic profit in the long run or achieve allocative or productive efficiency. In the long run, a monopolistically competitive firm will earn only a normal profit, while a pure monopolist can earn an economic profit. Allocative and productive efficiency depend on the market structure and are not guaranteed in either monopolistic competition or monopoly.

An Important Similarity Between a Monopolistically Competitive Firm and a Pure