Answer: select the profit maximizing quantity to produce
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The demand curve as perceived by a monopolistic competitor is ______________.
If a monopoly or a monopolistic competitor raises their prices then decline in quantity demanded will be larger for the monopolistic competitor . The demand curve as perceived by a monopolistic competitor is ______________ .
The perceived demand curve for a monopolistic competitor is flatter than the perceived demand curve for a monopolist (because if a monopolistic competitor raises price it will loose some customers to the competition while a monopolist does not face any competition .
The demand curve as faced by a monopolistic competitor is flat which means that the monopolistic competitor can raise its price without losing all of its customers or lower the price and gain more customers. The demand curve facing a monopolistically competitive firm is more elastic than that of a monopoly where there are no close substitutes.
A monopolistic competitor like a monopolist faces a downward-sloping demand curve and so it will choose some combination of price and quantity along its perceived demand curve . As an example of a profit-maximizing monopolistic competitor consider the Authentic Chinese Pizza store which serves pizza with cheese sweet and sour sauce and your choice of vegetables and meats.
Concepts of Proportional and Perceived Demand Curve : We have said that monopolistic competition is an amalgam of perfect competition and m...
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