An important distinction between a profit-maximising firm in a monopolistically competitive market differs and a firm in a perfectly competitive market is the firm in the monopolistically competitive market:

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In a monopolistically competitive market structure, firms produce differentiated products and therefore, face a downward-sloping demand curve for their product. In contrast, firms in a perfectly competitive market sell identical products and, as a result, face a horizontal or perfectly elastic demand curve at the market clearing price. Firms in both market structures aim to maximize their profits, but the approach to doing so differs.

An Important Distinction Between a Profit-Maximising Firm in a Monopolistically