Final answer:
The type of loss that exists in monopolistically competitive markets but not as much in monopolies is inefficiency, manifesting as deadweight loss and resulting from firms charging higher prices and operating with excess capacity.
Step-by-step explanation:
The type of loss that exists in monopolistically competitive markets but not to the same extent as with monopolies is known as deadweight loss due to inefficiency. In monopolistically competitive markets, many companies compete with similar yet differentiated products, such as various restaurants in large cities offering unique culinary dishes. This structure leads to inefficient outcomes in two main ways. First, firms charge prices above marginal costs to maximize profits. Second, firms tend to operate with excess capacity.
Unlike perfect competition, where firms earn zero economic profits in the long run due to free entry and exit, monopolistic competition results in an array of product variety and some level of market power for individual firms, which allows for short-term economic profits. However, in the long run, the entry of new competitors drives these firms towards a zero economic profit outcome, though they still retain some inefficiencies as compared to perfectly competitive markets.