The monopolistic competitive firm faces a __________ demand curve and therefore is a price __________.
A)downward-sloping; searcher
B)horizontal; taker
C)downward-sloping; taker
D)horizontal; searcher

Question

Quizplus · Accepted Answer

In a monopolistic competitive market, firms face a downward-sloping demand curve because they sell differentiated products, giving them some control over their prices. Thus, they are price searchers, not price takers, as they can influence their product's price through marketing, product differentiation, and other strategies.

The Monopolistic Competitive Firm Faces a __________ Demand Curve and Therefore