Why demand curve face monopolistically competition
Why is demand curve facing a monopolistically competitive firm probable to be very elastic?
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Answer: This is because the products generated by monopolistically competitive firms are close substitutes to one other. When products are close substitutes to one other the elasticity of demand is high, that is what makes the firm’s demand curve (that is, under monopolistic competition) much elastic.
Total cost can be estimated as area: (i) 0bcq1. (ii) 0adq2. (iii) 0Peq2. (iv) aPed. (v) Cannot be measured in illustrated figure. Q : Inadequate competition or lack of A firm’s capability to alter the price of its output due to inadequate competition or a lack of perfect substitutes for its products is an illustration of: (i) adverse selection. (ii) simple game theory. (iii) X-inefficiency. (iv) strategic behavior. (v) market
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