Answer:
The correct answer is: product differentiation.
Explanation:
A perfectly competitive industry has a large number of firms producing identical products. All the firms are price takers and the price is determined by the market forces of demand and supply.
In a monopolistic market, there is a large number of firms selling differentiated products. The firms are price makers facing a downward sloping demand curve.
A firm in a monopolistic market thus has to face competition from firms producing close substitutes, there is no such thing with a firm in a perfectly competitive market.
