A monopolistically competitive firm can raise its price somewhat without fear of great change in unit sales because of
A)Brand loyalty.
B)Economies of scale.
C)Inelastic demand.
D)Large market shares of firms in the market.

Question

Quizplus · Accepted Answer

In a monopolistically competitive market, firms differentiate their products from their competitors, often through branding and marketing. This differentiation creates brand loyalty among consumers, making them less price-sensitive and allowing firms to raise their prices without fear of losing a significant number of customers.

A Monopolistically Competitive Firm Can Raise Its Price Somewhat Without