With respect to output production,a monopolistically competitive firm produces

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Monopolistically competitive firms face downward sloping demand curves and therefore have some market power to raise prices. In order to maximize profits, a monopolistically competitive firm will produce less output than a perfectly competitive firm in order to charge a higher price. Therefore, a monopolistically competitive firm will produce a smaller amount of output than a perfectly competitive firm.

With Respect to Output Production,a Monopolistically Competitive Firm Produces