The behavior of firms in monopolistic competition is similar to that in a monopoly, but monopolistic competition allows for entry and exit of competing firms.

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In a monopolistic competition, firms have some market power and can set prices, similar to a monopoly. However, in monopolistic competition, there are lower barriers to entry and exit, allowing for greater competition and a more competitive market than a monopoly.

The Behavior of Firms in Monopolistic Competition Is Similar to That