Correct me if I'm wrong, but this is my understanding:
- In perfect competition, firms set the price at the marginal cost of production. This gives them a relatively low amount of profit.
- In monopolistic competition, a firm would set the price higher than the marginal cost of production, and thereby gain more profit.
- In a real economy, firms in some industries (e.g. computer software) are more in a state of monopolistic competition, where they may have more profit. Firms in other industries (e.g. gas stations) are closer to perfect competition, with lower profits.
- When possible, firms wish to break into industries where firms make more profit. This creates an opportunity cost for staying in the perfectly competitive industry.
- Does this opportunity cost drive up prices in the lower-profit, more competitive industry, above the marginal cost of production?
So, as a specific example, gas stations pretty much directly compete with nearby gas stations on price. Firms in many other markets have more market power and may make more profit. Does the opportunity cost of not switching to one of those other markets, allow the gas stations to increase the price of gas above the marginal cost (before accounting for that opportunity cost)?