They have the potential to become a household name brand. They also will usually be cheaper, or have unique products.
The general monopolistically competitive firm does earn profit. They earn point about as much as oligopolies.
without economies of scale
No. A monopolistically competitive firm should produce up to the point where marginal revenue equals marginal cost.
Monopolistically competitive firms are not considered to be perfectly efficient in the long run. This is because they have some degree of market power due to product differentiation, which can lead to higher prices and lower output compared to perfectly competitive markets.
A monopolistically competitive firm's demand curve will be least elastic when its products are unique and have few close substitutes, leading to less responsiveness to price changes by consumers.
No because it does not produce at minimum average total cost
many firms selling products that are similar, but not identical.
faces a downward-sloping demand curve
No it does not. Only Perfectly Competitive firms have a horizontal Marginal Cost curve, which is also there demand curve.
Consumers will substitute with a rival's product.
Consumers will substitute with a rival's product.
Consumers will substitute with a rival's product.