In a monopolistically competitive market, as the number of product variants decreases, the price of a particular firm's product is likely to_____ because the demand for each variety becomes more _____.

Question

Quizplus · Accepted Answer

As the number of product variants decreases in a monopolistically competitive market, each remaining product becomes more unique and faces less direct competition, leading to an increase in demand for each specific variant. This makes the demand for each product more inelastic, as consumers have fewer substitutes to choose from, allowing firms to raise prices.

In a Monopolistically Competitive Market, as the Number of Product