Answer to Question #115533 in Microeconomics for Qondile

Question #115533
discuss the shape of demand curve for a monopolistically competitive firm
1
Expert's answer
2020-05-13T11:18:05-0400

In a monopolistically competitive market the demand curve slopes downwards which signifies that firms in the industry have market power which allows firms to increase their prices without loosing customers. The downward slope implies that as price decreases the quantity demanded for that good increases hence a firm is a price setter and not a price taker. The downward slope contributes to the inefficiency of the market leading to a loss in consumer surplus and excess production capacity


Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!

Leave a comment

Ask Your question

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS