Compared with monopolistic competition a firm rsquo s demand curve under monopoly is ........

Compared with monopolistic competition, a firm’s demand curve under monopoly is :

Equally elastic

Less elastic

More elastic

Infinitely elastic

- Correct Answer: Option 2 - Less elastic

- Under a monopoly, a firm is the sole supplier. Consumers have no alternatives.

- This lack of substitutes makes the demand curve less sensitive to price changes.

- Hence, the demand curve is less elastic under monopoly.

- Monopolistic competition involves many firms. Consumers have choices.

- With more substitutes, the demand curve in monopolistic competition is more elastic.

- Option 1: Equally elastic – Incorrect as monopoly offers no competition.

- Option 3: More elastic – Inaccurate due to less consumer choice.

- Option 4: Infinitely elastic – Also incorrect; implies perfect elasticity.

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