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

- A monopolistic competition market has many firms, each with differentiated products.

- In such a market, individual firms face a downward-sloping demand curve that is relatively elastic because substitutes are available.

- A monopoly market has one firm without close substitutes, giving the firm more market power.

- As a result, a monopoly's demand curve is less elastic since consumers have fewer alternatives.

- Option 1: Equally elastic is incorrect because a monopoly has less competition.

- Option 3: More elastic is incorrect because a monopoly faces fewer substitutes.

- Option 4: Infinitely elastic is incorrect as this would imply perfect competition.

- Correct Answer: Option 2: Less elastic

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