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Product differentiation is an important aspect of monopolistic competition. Under monopolistic competition, unlike perfect competition, product is not homogenous.
The demand curve for a monopolistically competitive firm is downward sloping because of product differentiation. The product differentiation may be in the form of features, quality or quantity. But it is quite elastic since there are close substitutes for the product of a firm. The marginal revenue for any quantity will be less than the corresponding price because the demand curve is downward sloping. The basic principle of maximizing is same for a firm under monopolistic competition. The firm maximizes profit by selecting the output for which marginal revenue equals marginal cost. It then chooses the price that allows it to sell the profit-maximizing in the long run, since there is free entry and exit under monopolistic competition, the firms in industry get only normal profits.