In monopolistic competition, the market demand is not perfectly elastic; rather, it is relatively elastic. In perfect competition, the demand curve faced by each individual firm is perfectly elastic because the firm is a price taker and can sell as much output as it wants at the prevailing market price. This means that the firm can increase its output without affecting the market price. In monopolistic competition, however, the demand curve faced by each firm is downward-sloping and relatively elastic. This is because firms in monopolistic competition produce differentiated products, which leads to some degree of market power. While firms can still increase their output without directly affecting the market price, they must consider the impact of their actions on the perceived differentiation and attractiveness of their product, which influences the elasticity of demand they face. As a result, the demand curve is not perfectly elastic in monopolistic competition, and firms cannot earn long-run profits due to the presence of low barriers to entry, which leads to competitive pressures eroding profits over time