One of the assumptions of monopolistic competition is that firms produce differentiated products. What does this assumption imply about the demand curve facing a representative firm?
What will be an ideal response?
Product differentiation is a source of market power. This implies that the monopolistically competitive firm faces a downward-sloping demand curve.
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Refer to the table above. Assume that the market for notebooks is in equilibrium. Which of the following is likely to happen if a few sellers of notebooks decide to exit the market, everything else remaining unchanged?
A) Both the equilibrium price and quantity of notebooks remain unchanged. B) Both the equilibrium price and quantity of notebooks decrease. C) The equilibrium price of notebooks increases, but the equilibrium quantity decreases. D) The equilibrium price of notebooks decreases, but the equilibrium quantity increases.
What percentage of American workers now belong to labor unions?
a. less than 20 percent b. about 40 percent c. about 60 percent d. more than 80 percent
In the United States, the incidence of poverty has declined since the 1970s
a. True b. False Indicate whether the statement is true or false
If the exchange rate between the U.S. dollar and the Mexican peso went from $1 US = 9 peso to $1 US = 10 peso, then
a. American goods have become less expensive for Mexicans. b. Mexican goods have become more expensive for Americans. c. American goods have become more expensive for Mexicans. d. American exports to Mexico are likely to increase.