A monopolistically competitive firm has a downward-sloping demand curve for its product, primarily because:
A)there exist no barriers to entry or exit in the long run.
B)there are many sellers in the industry.
C)the firm sells a product distinct from products sold by competing firms.
D)the price is greater than the marginal revenue.

Question

Quizplus · Accepted Answer

A monopolistically competitive firm sells a product that is differentiated from other firms, meaning that it has unique features or qualities that set it apart in the market. This differentiation creates a slightly different demand curve for each firm, resulting in a downward-sloping curve.

A Monopolistically Competitive Firm Has a Downward-Sloping Demand Curve for Its