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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.
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Under what circumstances will a monopolistically competitive firm's demand curve be least elastic?
A monopolistically competitive firm's demand curve will be least elastic when its products are unique and have few close substitutes, leading to less responsiveness to price changes by consumers.
Is it true the demand curve of a monopolistic competitive firm is more elastic than that of a pure monopolist?
YES
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.
Would a monopolist ever operate in the in elastic portion of demand curve?
yes
Is the monopolist's demand curve elastic or inelastic?
The monopolist's demand curve is typically inelastic, meaning that changes in price do not have a significant impact on the quantity demanded by consumers.
Under what circumstances will a monopolistically competitive firm's demand curve be least elastic?
A monopolistically competitive firm's demand curve will be least elastic when its products are unique and have few close substitutes, leading to less responsiveness to price changes by consumers.
Is it true the demand curve of a monopolistic competitive firm is more elastic than that of a pure monopolist?
YES
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.
Would a monopolist ever operate in the in elastic portion of demand curve?
yes
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.
Is the monopolist's demand curve elastic or inelastic?
The monopolist's demand curve is typically inelastic, meaning that changes in price do not have a significant impact on the quantity demanded by consumers.
A profit maximizing monopolist with a positive marginal cost of production will always?
Produce in the elastic range of the demand curve
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.
What type of curve does the perfectly competitive firm face?
perfectly elastic demand function.
A firm operating in a purely competitive resource market faces a resource supply curve that is?
B. Perfectly elastic This is because it is operating in a perfect competitive market
The labor demand curve of a purely competitive seller perfectly elastic?
yes the demand curve is perfectly inelastic and horizontal
What is pure competitive?
Firms are price takers, price is equal to marginal costs, demand is perfectly elastic, i.e. constant and horizontal, the firms makes zero Economics profits.
