Monopolistic competition has a downward sloping demand curve. Thus, just as for a pure monopoly, its marginal revenue will always be less than the market price, because it can only increase demand by lowering prices, but by doing so, it must lower the prices of all units of its product. Hence, monopolistically competitive firms maximize profits or minimize losses by producing that quantity where marginal revenue equals marginal cost, both over the short run and the long run.
