Would raising the price for a product create a larger decline in quantity demanded for a monopolistic competitor's than it would for a monopoly?
A) no; a monopolistic competitor perceives demand as a price maker
B) no; conditions of imperfect competition means demand is constant
C) yes; but temporarily because price increases only create a short-run decline
D) yes; consumers will buy from competitors offering lower priced substitutes

Question

Quizplus · Accepted Answer

Monopolistic competitors face a downward-sloping demand curve, meaning consumers can switch to close substitutes if prices rise, unlike in a monopoly where the firm is the sole provider of a product with no close substitutes, making demand less elastic to price changes.

Would Raising the Price for a Product Create a Larger