In a market characterized by monopolistic competition, which of the following is a key feature that distinguishes it from perfect competition?

In a market with monopolistic competition, one key feature that sets it apart from perfect competition is product differentiation. This means that the businesses in monopolistic competition sell products that are similar but not identical, such as different brands of toothpaste that might have unique flavors or special ingredients. In contrast, perfect competition involves products that are exactly the same, like a pound of sugar from any seller being identical to another. Because of product differentiation, companies in monopolistic competition can attract customers based on their specific preferences, allowing them to have some control over pricing. For example, a customer might choose a particular brand of cereal not just for its price but also for its taste or packaging, which illustrates how businesses can stand out in this type of market.