The demand curve for a firm under monopolistic competition is:
A) U-shaped.
B) upward sloping.
C) downward sloping.
D) vertical.

Question

Quizplus · Accepted Answer

The demand curve for a firm under monopolistic competition is downward sloping. This is because the firm faces competition from other firms offering substitute products, which affects the quantity demanded at different prices. As the firm raises its price, consumers are more likely to switch to a substitute product, leading to a decrease in quantity demanded. Therefore, the demand curve for a monopolistically competitive firm is downward sloping.

The Demand Curve for a Firm Under Monopolistic Competition Is