Monopolistic competition is defined as a type of market structure where

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Monopolistic competition is characterized by the presence of many firms that produce differentiated products, which is not the same as producing a homogeneous good. Unlike in perfect competition, these firms have some degree of market power that allows them to influence the price of their product. However, there are no significant barriers to entry in the long run, and firms can only earn normal profit in the long run due to the entry of new firms, which erodes any short-term economic profits.

Monopolistic Competition Is Defined as a Type of Market Structure