A monopolistically competitive market is like a competitive market in that

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Both monopolistically competitive and competitive markets feature easy entry by new firms in the long run. However, in a monopolistically competitive market, firms differentiate their products to some degree, which allows them to charge prices above marginal cost. In a competitive market, firms sell identical products and must charge the market price. It is also worth noting that in both market structures, firms typically aim to maximize profits.

A Monopolistically Competitive Market Is Like a Competitive Market in That