Question

The demand curve of a monopolistically competitive producer is less elastic than that of a purely competitive producer. true or false

1. Philomena
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.