For a monopolistically competitive firm, its demand curve is the same as its marginal revenue curve.

Question

Quizplus · Accepted Answer

In a monopolistically competitive market, the firm faces a downward-sloping demand curve, meaning that it can sell more only by lowering its price. This results in the marginal revenue curve lying below the demand curve because each additional unit sold has a lower price than the previous one, reducing the revenue gained from selling additional units.

For a Monopolistically Competitive Firm, Its Demand Curve Is the Same