A monopolistically competitive firm has some degree of market power because

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A monopolistically competitive firm sells a differentiated product, meaning it has some degree of market power as consumers may perceive its product as unique or superior to other products in the market. This allows the firm to have some control over the price it charges for its product. However, this market power is limited by the presence of other firms selling substitute products. Therefore, the firm may not always make positive profits as it still faces competition in the market. There are no natural or legal barriers to entry in a monopolistically competitive market.

A Monopolistically Competitive Firm Has Some Degree of Market Power