The demand curve for a firm operating in a monopolistically competitive market is best described as:
A) U-shaped.
B) upward-sloping.
C) downward-sloping.
D) horizontal.

Question

Quizplus · Accepted Answer

In a monopolistically competitive market, firms have some degree of market power, allowing them to set prices above marginal cost. This results in a downward-sloping demand curve, as higher prices lead to lower quantities demanded.

The Demand Curve for a Firm Operating in a Monopolistically