In a monopolistically competitive market, which of the following best describes the competitive strategy that firms employ to maximize their profits?

In a monopolistically competitive market, firms aim to maximize their profits by differentiating their products from those of their competitors. This means they create unique features, branding, or quality that make their products stand out, allowing them to charge higher prices. For example, two coffee shops in the same area may offer different types of coffee, one focusing on organic ingredients and the other on unique flavors, attracting different customer bases. By doing this, each firm can maintain some control over its prices, unlike in perfect competition where firms are price takers. Ultimately, the goal is to appeal to specific consumer preferences, which helps the firm earn more profit while still competing with others in the market.