Question

What elasticity of demand curve confronts monopolistically competitive firms?

Answer 1

Explanation:

The demand curve that confronts a monopolistically competitive firms is: A. less elastic than the demand curve that confronts the industry. B. perfectly inelastic because of numerous substitutes for the firm's product.

Answer 2

Less elastic than the demand curve

Explanation:

The elasticity of demand that monopolistically firm confront is less elastic than the demand curve facing a perfectly competitive firms. Because the demand curve of the perfectly competitive firm is horizontal due to the availability of a large number of substitutes but in monopolistically competitive firm commodities are differentiated. That is why the demand curve is less elastic.

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Elasticity of demand curve

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