Short-run equilibrium in monopolistic competition and differs from that of monopoly because the monopolistic competitor can make losses in the short run, while in a monopoly, profits will always be zero or positive.

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In the short run, both monopolistic competitors and monopolies can make profits or incur losses. The key difference is that in the long run, monopolistic competitors tend to earn zero economic profit due to free entry and exit, while monopolies can sustain positive profits due to barriers to entry.

Short-Run Equilibrium in Monopolistic Competition and Differs from That of Monopoly