Why does the term "monopoly" appear in the name of the market structure known as "monopolistic competition"?

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Firms in monopolistic competition set prices equal to marginal costs, similar to monopolists.Firms in monopolistic competition face a downward-sloping demand curve for their unique products, just like monopolists do.Monopolistic competition allows free entry and exit of firms, the same as in monopoly markets.Firms in monopolistic competition operate at a scale larger than the most efficient level, as monopolists do.

Explanation

The term "monopoly" in monopolistic competition highlights that firms encounter a downward-sloping demand curve for their differentiated goods, which is a characteristic shared with monopolists. This means each firm has some control over its pricing because their product is not a perfect substitute. Other options incorrectly describe pricing behavior, market entry conditions, or scale of production.