The monopolistic competitor's demand curve is
A)perfectly elastic because of the many buyers and sellers in the market.
B)downward sloping because of product differentiation.
C)perfectly elastic because of identical products.
D)downward sloping because of the few buyers and sellers in the market.
E)none of the above

Question

Quizplus · Accepted Answer

The demand curve for a monopolistic competitor is downward sloping due to product differentiation, which allows firms to have some control over their pricing. This is because in monopolistic competition, each firm offers a product that, while similar to others, is not identical, giving consumers a variety of choices and allowing firms to compete on factors other than price, such as quality, brand, or features.

The Monopolistic Competitor's Demand Curve Is