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.
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Income elasticity of demand: Income elasticity of demand is the degree of receptiveness of demand to the modification in income. Discover Q & A Leading Solution Library Avail More Than 1429916 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads No hassle, Instant Access Start Discovering 18,76,764 1940495 Asked 3,689 Active Tutors 1429916 Questions Answered Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!! Submit Assignment
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