The demand curve facing a monopolistic competitor:
A) is perfectly inelastic.
B) is perfectly elastic.
C) slopes downward to the right.
D) has a positive slope.

Question

Quizplus · Accepted Answer

A monopolistic competitor faces a downward-sloping demand curve, indicating that as the price increases, the quantity demanded decreases. However, the demand curve is not perfectly elastic or inelastic, as a monopolistic competitor has some control over the price due to the differentiated nature of their product.

The Demand Curve Facing a Monopolistic Competitor