Why is the demand curve faced by the monopolistic competitor more elastic than the demand curve by mnoplist?

Question

Why is the demand curve faced by the monopolistic competitor more elastic than the demand curve faced by the monopolist

Answer 1

Monopolistic competition is the dog-eat-dog situation. The competitor cuts to minimal marginal costs as if a monopoly in order to get some business and deny competitor's business, even if it is below costs. The demand for below-cost products is almost infinitely high, being below the normal marginal praxis, the economy will take all it can get.

In the monopoly, we generally figure at a different marginal cost/demand intersection. The monopoly pricing as high as the market will bear will be pricing stratospherically, so to speak, so the demand is tenuously tight. Customers are buying only what they have to because price is so high.

In the monopolistic competition scene, a higher price will be too high, customers can go to competitors who have it on a better sale price. In the true monopoly situation, while the monopoly could sell to undercut any competitors, if there really are no competitors they will usually charge as much as they chose and true demand forces customers to pay top prices.

Answer 2

a superbly aggressive agency because in ideal competition marketplace a touch replace in fee make an infinity replace in quantity call for. subsequently the little replace in fee make an infinity replace in call for.