Why demand curve face monopolistically competition
Why is demand curve facing a monopolistically competitive firm probable to be very elastic?
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Answer: This is because the products generated by monopolistically competitive firms are close substitutes to one other. When products are close substitutes to one other the elasticity of demand is high, that is what makes the firm’s demand curve (that is, under monopolistic competition) much elastic.
The technology is such that LAC is minimized at firm’s output equivalent to 10 and minimum LAC is Rs. 15. Assume that the demand schedule for the product is given as shown: Q : Marginalism and characteristics Explain Explain about Marginalism and characteristics.
Explain about Marginalism and characteristics.
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