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The Theory Of The Firm Under Perfect Competition
Question
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Why is AR curve in monopolistic competition more elastic than the one in monopoly?

Answer

[Hint. Because a firm can sell more only by lowering the price of its commodity.]

Tips: -

[Hint. Because in monopoly, no close substitute of the commodity is available whereas in monopolistic competition in any close substitute of differentiated goods are available.]

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

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. 

Can a seller under monopolistic competition influence the price?

Why under imperfect competition, MR is less than price?

Why is demand for a good under monopoly less elastic than in monopolistic competition? 

What is meant by the term equilibrium?  

What is an equilibrium price?