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Is it true the demand curve of a monopolistic competitive firm is more elastic than that of a pure monopolist?
Wiki User
∙ 11y ago
YES
Wiki User
∙ 11y ago
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How does the elasticity of the monopolistic competitor's demand curve compare to that of a pure competitor or a pure monopolist?
A monopolistic competitor's demand curve is less elastic than apure competitor's which is less elastic than a pure monopolist's.
The demand curve for a monopolist differs from the demand curve faced by a competitive firm?
The pure monopolist's market situation differs from that of a competitive firm in that the monopolist's demand curve is downsloping, causing the marginal-revenue curve to lie below the demand curve. Like the competitive seller, the pure monopolist will maximize profit by equating marginal revenue and marginal cost. Barriers to entry may permit a monopolist to acquire economic profit even in the long run.
Would a monopolist ever operate in the in elastic portion of demand curve?
yes
Why is the demand curve facing a monopolist less elastic than one facing a firm that operates in a monopolistically competitive market?
In a monopoly, the monopolist company is the only product in the market place. However, a company competing in a monopolistically competitive market has multiple "similar" competitors that all try and differentiate themselves with specialized or additional services; i.e. the Italian restaurant serving food only from northern Italy. These companies may be a monopoly in the sense that their niche product is one-of-a-kind, but there are substitute products that can replace them if their price becomes too high to the consumer. As a result, the firm in a monopolistically competitive has a more elastic demand than a true monopolist.
Will a monopolist charge a lower price where demand is price elastic and a higher price where demand is price inelastic?
Yes. A monopolist would tend to charge a price closer to fair market value when the demand for a good is elastic. If not demand would be affected. With a monopoly controlled inelastic good the consumer has no recourse and there for would be and the mercy of the supplier.
How does the elasticity of the monopolistic competitor's demand curve compare to that of a pure competitor or a pure monopolist?
A monopolistic competitor's demand curve is less elastic than apure competitor's which is less elastic than a pure monopolist's.
The demand curve for a monopolist differs from the demand curve faced by a competitive firm?
The pure monopolist's market situation differs from that of a competitive firm in that the monopolist's demand curve is downsloping, causing the marginal-revenue curve to lie below the demand curve. Like the competitive seller, the pure monopolist will maximize profit by equating marginal revenue and marginal cost. Barriers to entry may permit a monopolist to acquire economic profit even in the long run.
Would a monopolist ever operate in the in elastic portion of demand curve?
yes
Why is the demand curve facing a monopolist less elastic than one facing a firm that operates in a monopolistically competitive market?
In a monopoly, the monopolist company is the only product in the market place. However, a company competing in a monopolistically competitive market has multiple "similar" competitors that all try and differentiate themselves with specialized or additional services; i.e. the Italian restaurant serving food only from northern Italy. These companies may be a monopoly in the sense that their niche product is one-of-a-kind, but there are substitute products that can replace them if their price becomes too high to the consumer. As a result, the firm in a monopolistically competitive has a more elastic demand than a true monopolist.
Will a monopolist charge a lower price where demand is price elastic and a higher price where demand is price inelastic?
Yes. A monopolist would tend to charge a price closer to fair market value when the demand for a good is elastic. If not demand would be affected. With a monopoly controlled inelastic good the consumer has no recourse and there for would be and the mercy of the supplier.
A profit maximizing monopolist with a positive marginal cost of production will always?
Produce in the elastic range of the demand curve
A firm in a monopolistically competitive market is similar to a monopolist in the sense that it?
faces a downward-sloping demand curve
What type of curve does the perfectly competitive firm face?
perfectly elastic demand function.
The labor demand curve of a purely competitive seller perfectly elastic?
yes the demand curve is perfectly inelastic and horizontal
What is the demand curve faced by a pure monopolist?
The demand curve faced by a pure monopolist is of downward sloping in shape.
Would the firm ever operate on the elastic portion of the demand curve if MC equals 0?
Yes; indeed, a monopolist ALWAYS operates on the elastic portion.Here's a simple reason why: if demand were inelastic, raising price would yield more revenue, which would yield more profit.
Why demand always downward slop in competitive market?
The reason why demand curve is always downward slopin a competitive market is because there are many sellers and buyers in the market.so the price of a commodity in such market determines the demand and supply of that product.unlike a monopolistic market were there is just öne seller and many buyers
