In monopolistic competition, the average revenue curve of the firm is ______________.

less elastic

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more elastic

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unit elastic

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None of the above

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Solution

The correct option is B more elastic
Average curve will be considerably more elastic because the monopolistically competitive firm has less control over the price that it can charge for its output.

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Similar questions

Why is the average revenue curve of a monopolist less elastic than the average revenue curve of a firm under monopolistic competition? Explain.

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