Monopolistically competitive firms do NOT differentiate their products by

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Monopolistically competitive firms differentiate their products through non-price factors, such as product design, packaging, marketing, and customer service. This means that they do not change the physical characteristics of their products, sell them at different locations, or offer different levels of service. However, they may charge different prices to different groups of consumers based on their willingness to pay or their willingness to search for better deals. This price discrimination helps the firm to increase its profits by capturing more consumer surplus. Therefore, option D is the best choice.

Monopolistically Competitive Firms Do NOT Differentiate Their Products by