The monopolistic competitor's demand curve is
A)perfectly elastic because of the many buyers and sellers in the market.
B)downward sloping because of product differentiation.
C)perfectly elastic because of identical products.
D)downward sloping because of the few buyers and sellers in the market.

Question

Quizplus · Accepted Answer

Monopolistic competitors have downward sloping demand curves because they produce differentiated products, which means that consumers are willing to pay different prices for different products. This creates monopolistic power for the producer as they have some control over the price of their product.

The Monopolistic Competitor's Demand Curve Is