Profit Maximization for Monopolistic Competition

Q. Why is the demand curve of a firm under perfect competition parallel to X-axis and negatively sloped under monopoly?

Q. A monopolist fixes price of his product on the basis of elasticity of demand for his product.

1. True
2. False

Q.
From a point of intersection of two demand curves, a flatter demand curve shows higher elasticity of demand.

1. True
2. False

Q. At the point above the middle of a straight line demand curve, elasticity of demand is __________

1. zero
2. equal to $1$
3. greater than $1$
4. constant

Q. Under monopolistic competition the cross elasticity of demand for the product of a single firm is _________.

1. infinite
2. highly elastic
3. highly inelastic
4. zero

Q. Explain why the demand curve facing a firm under monopolistic competition is negatively sloped.