Final answer:
The concept of differentiated products is integral to monopolistic competition, where the degree of product variety and unique characteristics available in the market allows firms to act like monopolies over their specific products.
Step-by-step explanation:
The concept of differentiated products is closely linked to monopolistic competition and refers to the scenario in which firms sell goods and services that are distinct and varied in nature.
This differentiation can result from a number of factors such as the characteristics of the good or service, the location from which it is sold, intangible aspects like brand image, and consumer perceptions. It is the variety in styles, flavors, and other characteristics that creates product differentiation leading to monopolistic competition, thereby allowing each firm to behave like a monopoly over its particular product