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The Theory Of The Firm Under Perfect Competition
Question
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Why is demand curve facing a monopolistically competitive firm likely to be very elastic?

Answer

Because close substitutes for product of any particular brand are available in plenty. A product which has close substitutes has elastic demand.

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Some More Questions From The Theory Of The Firm Under Perfect Competition Chapter

Name the market structure in which firm is itself an industry.

 Define the term market as used in economics.

What is meant by monopolistic competition?

What are selling costs?

Define homogeneous product.

What is meant by differentiated product?

 Define perfect competition.

 Is the seller under perfect competition a price maker or a price taker? 

Define monopoly.  

Define market equilibrium.