This preview shows page 1. Sign up to view the full content.
Unformatted text preview: output when marginal revenue= marginal cost. 4. Why is the monopolistic competitors demand curve more elastic than a pure monopolists, but less elastic than a pure competitors? What factors determine the price elasticity of demand for a monopolistic competitor? Ans: The product of a monopolist has no substitutes for consumers to choose. This makes the demand curve of monopolist less elastic than that of a monopolistic competitor. For pure competition, customers will choose a product with a lower price because its esay for them to find a substitute, so this makes the price elasticity of demand of a monopolistic competitor lower than that of a pure competitor. Jason Wang Eco201 06:00-08:45 Hu...
View Full Document
This note was uploaded on 08/10/2010 for the course ASC 102 taught by Professor Johnh during the Spring '10 term at 카이스트, 한국과학기술원.
- Spring '10