Final answer:
Firms in monopolistically competitive industries have market power due to product differentiation.
Step-by-step explanation:
Firms in monopolistically competitive industries have some degree of market power as a result of product differentiation. Product differentiation refers to the strategy of distinguishing a firm's product or service from those of its competitors in terms of quality, design, features, or branding.
By creating a unique and desirable product, firms can build customer loyalty and gain a competitive advantage, allowing them to have some control over market prices and achieve higher profits.