What type of demand curve does product differentiation cause the seller of a good to face

Question

Quizplus · Accepted Answer

Product differentiation usually leads to the creation of a monopolistic competition market structure, which is known for an downward-sloping demand curve. This is because firms in a monopolistic competition market sell differentiated products, meaning they have some degree of market power and can raise prices without losing all their customers. However, as they increase the price, fewer people are willing to buy the product. This leads to a downward-sloping demand curve, where the more the price increases, the less people are willing to buy the product.

What Type of Demand Curve Does Product Differentiation Cause the Seller