The demand curve for a firm operating in a monopolistically competitive market is BEST described as:
A)U-shaped.
B)upward sloping.
C)downward sloping.
D)horizontal.

Question

Quizplus · Accepted Answer

In a monopolistically competitive market, firms face a downward-sloping demand curve as they have some degree of market power to set their own prices, but there are still close substitutes available. This means that as the firm raises its price, some consumers will switch to a substitute product, leading to a decrease in demand for the original firm's product.

The Demand Curve for a Firm Operating in a Monopolistically