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Produces differentiated goods by monopolistic competitors

Monopolistic competitors generate differentiated goods which have numerous potential: (1) substitutes and important barriers to entry protecting them from potential rival producers. (2) close substitutes whose suppliers face no long run barriers to entry or exit. (3) suppliers of complementary goods who have substantial freedom of entry/exit. (4) buyers but few close substitutes and significant long run barriers to entry or exit. (5) options for increased profitability in the long run.

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