When firms charge different prices for differentiated products in
Imperfect competition, each firm's demand curve is
___________ than would be the case if all firms had identical
Products and prices.
A)flatter
B)steeper
C)farther to the right
D)less elastic

Question

Quizplus · Accepted Answer

When firms charge different prices for differentiated products, their demand curves are flatter than they would be if all firms had identical products and prices. This is because consumers have more options and can switch to a different product if the price of one product increases too much. As a result, firms must be more sensitive to changes in price and cannot simply raise prices without losing customers.

When Firms Charge Different Prices for Differentiated Products in