Advertisement Remove all ads

Explain Why the Demand Curve Facing a Firm Under Monopolistic Competition is Negatively Sloped. - Economics

Short Note

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

Advertisement Remove all ads

Solution

A monopolistic firm has differentiated products; thus, it has to lower its price in order to increase its sales. Further, the products of different monopolistic firms are close substitutes to each other. Hence, the demand for all the products is elastic. For this reason, the demand curve is negatively sloped.

  Is there an error in this question or solution?
Advertisement Remove all ads

APPEARS IN

NCERT Class 12 Economics Introductory Microeconomics
Chapter 6 Non-Competitive Markets
Exercise | Q 9 | Page 101
Advertisement Remove all ads
Advertisement Remove all ads
Share
Notifications

View all notifications


      Forgot password?
View in app×