In monopolistic competition, if a firm produces a highly desirable product relative to its competitors, the firm will be able to raise its price without losing any customers.

Question

Quizplus · Accepted Answer

In monopolistic competition, there are close substitutes for the products, which means consumers have many alternatives to choose from. Therefore, if a firm raises its price, consumers can easily switch to a competitor's product that offers a similar benefit at a lower price. This makes it unlikely for a firm to be able to raise its price without losing any customers.

In Monopolistic Competition, If a Firm Produces a Highly Desirable