The quantity produced in a monopolistically competitive market is ________ than the quantity produced in a perfectly competitive market,and the price charged in a monopolistically competitive market is ________ than the price charged in a perfectly competitive market.

Question

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In a monopolistically competitive market, firms have some market power which allows them to charge higher prices compared to a perfectly competitive market where firms are price takers. However, because of the downward-sloping demand curve they face, they produce a lower quantity compared to the perfectly competitive market, where firms produce where price equals marginal cost, leading to a higher output.

The Quantity Produced in a Monopolistically Competitive Market Is ________