A monopolistically competitive firm faces a relatively steeper demand curve than a perfectly competitive firm.

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A monopolistically competitive firm faces a downward-sloping demand curve, which means that it has some power to set prices above marginal cost. In contrast, a perfectly competitive firm faces a horizontal demand curve, meaning that it must accept the market price as given and cannot influence it. Therefore, the monopolistically competitive firm's demand curve is typically steeper than the perfectly competitive firm's.

A Monopolistically Competitive Firm Faces a Relatively Steeper Demand Curve