Explain why the demand curve facing a firm under monopolistic competition is negatively sloped.
A monopolistic firm has differentiated products; thus, it has to lower its price in order to increase its sales. Further, the products of different monopolistic firms are close substitutes to each other. Hence, the demand for all the products is elastic. For this reason, the demand curve is negativelysloped.
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Welcome to the NCERT Solutions for Class 12 Micro Economics - Chapter . This page offers a step-by-step solution to the specific question from Excercise 1 , Question 9: Explain why the demand curve facing a firm under monopolistic competition is negatively sloped.....
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