Demand curve of each firm in monopolistic competition is ____________.

Downward sloping

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Parallel to X axis

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Corresponds to industry as a whole

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both a & c

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Solution

The correct option is D both a & c
Monopolistic competition is a type of imperfect competition where large number of sellers sell differentiated products which are not perfect substitutes of each other. Firms under monopolistic competition have market power because they can raise price of the product without losing the customers.Hence, demand curve of each firm in monopolistic competition is downward sloping and corresponds to industry as a whole.

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Similar questions

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