question archive How is the perceived demand curve for a monopolistic competitive firm different from the perceived demand curve for a monopoly or a perfectly competitive firm?
How is the perceived demand curve for a monopolistic competitive firm different from the perceived demand curve for a monopoly or a perfectly competitive firm?
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How is the perceived demand curve for a monopolistic competitive firm different from the perceived demand curve for a monopoly or a perfectly competitive firm?
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The demand curve of a monopolistic competitive firm is downward sloping. The perceived demand curve is based on the level of competition it confronts and the differentiated products. If the firm increases the price, customers may opt to purchase a comparable product from some other competitor.
The perfect competitive firm demand curve is flat, which is perfectly elastic. It can sell the products at the current market price.
