Because the monopolistically competitive firm faces a ________ demand curve for its product, it ________ the price of its output.
A)downward-sloping; cannot influence
B)horizontal; can influence
C)horizontal; cannot influence
D)downward-sloping; can influence

Question

Quizplus · Accepted Answer

Monopolistically competitive firms face a downward-sloping demand curve for their product, which means that they can influence the price of their output by adjusting their level of production and advertising. However, this influence is limited by the degree of substitutability between their product and those of their competitors.

Because the Monopolistically Competitive Firm Faces a ________ Demand Curve