The demand curve under monopolistic competition is _______________.

Horizontal

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Infinitely elastic

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Negatively sloped and highly elastic

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Negatively sloped and highly inelastic

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is D Negatively sloped and highly elastic
The demand curve for an individual firm is downward sloping in monopolistic competition, in contrast to perfect competition where the firm's individual demand curve is perfectly elastic. This is due to the fact that firms have market power: they can raise prices without losing all of their customers.

Suggest Corrections

Similar questions

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

Why is the demand curve of a firm under monopolistic competition more elastic than under monopoly? Explain.

Q. Highly elastic negatively sloped demand curve is related to ______.

Q. How is the demand curve under monopolistic competition different from demand curve of a firm under perfect competition?

Compare demand curves facing a seller under conditions of perfect competition, monopolistic competition and monopoly, clearly reflecting the difference in their elasticities. Draw 3 curves in a single diagram.

Join BYJU'S Learning Program