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1. True , The demand curve of a monopolistically competitive producer is less elastic than that of a purely competitive producer.

   Why do demand curves exist?

   • In a monopolistic competitive market, the demand curve slopes downward. This implies that when price drops, demand for the commodity rises in proportion.
   • Although it may seem simple at first glance, the shape of the demand curve has several significant ramifications for businesses operating in highly competitive markets.

   A monopolistically competitive firm’s demand curve is more elastic than a pure monopolist’s.

   The productivity of a resource and the market value of the output it generates determine how in-demand it is.

   In the long term, monopolistically competitive vendors make no economic profits.

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