Advertisements
Advertisements
Questions
Why is the demand curve under monopoly less elastic as compared to the demand curve under monopolistic competition?
Why is the demand curve facing a monopoly less elastic than under monopolistic competition?
Advertisements
Solution
The demand curve in monopoly is less elastic than in monopolistic competition because a monopolist is the sole provider of a unique product with no close substitutes, leaving consumers no choice except to buy from that firm even if the price rises. This makes demand relatively inelastic. In contrast, in monopolistic competition, numerous firms provide identical yet different products, allowing consumers to quickly transfer to alternatives if one firm raises its prices. As a result, the availability of close substitutes makes a firm’s demand under monopolistic competition more elastic.
APPEARS IN
RELATED QUESTIONS
The State Electricity Board sells electricity at cheaper rates for domestic use than for commercial use. Given statement shows an act of ______.
Explain any three features of a monopoly market.
Ram an employee and Shyam an elderly citizen was travelling by train from Delhi to Chennai separately. However, the cost of their tickets is different. Give reasons for the railways charging different prices to different customers.
Identify the feature of monopoly market from the following:
A ______ firm can sell the same product at different prices to different buyers.
Under a monopoly market, a firm/seller has ______.
Which of the following describes a monopoly firm?
Explain any four factors that lead to the emergence of monopoly.
Which market situation is called monopoly?
Why is a monopolist called a price maker?
Which factor mainly prevents new firms from entering a monopolistic market?
How are Average Revenue (AR) and Marginal Revenue (MR) curves related under monopoly?
What is meant by price discrimination in monopoly?
