As compared to monopolistic competition, the demand curve in a monopoly is:
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. less elastic.
- In a monopoly, the demand curve is generally less elastic compared to that in monopolistic competition.
- A monopolist's market power and the lack of close substitutes lead to a demand curve that is less elastic compared to the demand curves faced by firms in a monopolistically competitive market.