Brand loyalty makes the demand curve facing the monopolistically competitive firm less price-elastic.

Name: Brand loyalty makes the demand curve facing the monopolistically competitive firm less price-elastic.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Brand loyalty implies that consumers are willing to pay more for a specific brand, making the demand for that brand less sensitive to price changes. As a result, the demand curve facing the firm becomes less elastic, allowing the firm to raise its prices without losing too many customers.

Brand Loyalty Makes the Demand Curve Facing the Monopolistically Competitive