In what sense is a firm in monoolistically competition a monopoly in its market

Question

In what sense is a firm in monoolistically competition a monopoly in its market
It act independently of other sellers It sells a unique product It is able to direct entry barriers by deliberately lowering its prices Or it asked to maximize market share In what sense is a firm in monoolistically competition a monopoly in its market
It act independently of other sellers It sells a unique product It is able to direct entry barriers by deliberately lowering its prices Or it asked to maximize market share
It act independently of other sellers It sells a unique product It is able to direct entry barriers by deliberately lowering its prices Or it asked to maximize market share

Explanation / Answer

The answer is option (3):- it is able to direct entry barriers by deliberately lowering its prices.

In the monopolistically competitive market, all the firm sells homogeneous goods but are differentiated, so in long run if a firm can reduce its cost of production, then it creates a barrier for entry of new firms…. Hence acting as a monopolist.

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