Final answer:
The claim that monopolistic competition involves a few firms is false. It actually involves many firms selling differentiated products with low barriers to entry.
Step-by-step explanation:
The statement that monopolistic competition is a market structure in which a few firms sell similar products is false. Instead, monopolistic competition refers to a market characterized by many firms selling differentiated products that are similar but not identical. These products may differ due to various features such as the characteristics of the good or service, the location from which the firm sells the product, intangible aspects, and consumer perceptions. Unlike an oligopoly, monopolistic competition has few barriers to entry, allowing for a higher number of firms within the market. This market structure is common in the U.S. economy and spurs innovation, though it may also result in higher marketing and advertising expenses.