In Washington, D.C., there are many coffee shops, each offering nearly identical coffee but each shop is located in a different place around the city. It is likely a coffee shop in Washington, D.C., operates in a

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Monopolistic competition is characterized by many firms selling differentiated products in a market with low barriers to entry. In this case, each coffee shop offers a slightly different experience (location, atmosphere, customer service, etc.) despite offering nearly identical products (coffee). This suggests that there is low-barrier entry to the market, but each firm has some level of market power due to product differentiation.