Author Question: Explain what should happen to the demand curve of monopolistically competitive firms as consumers ... (Read 37 times)

mrsjacobs44 · **on:** Jun 29, 2018

Explain what should happen to the demand curve of monopolistically competitive firms as consumers increasingly perceive their products to be more like commodities. What industrial structure does this lead to?

What will be an ideal response?

Question 2

On a diagram of a production possibilities frontier, economic growth is represented by the slope of the production possibilities frontier.

Indicate whether the statement is true or false

TheDev123 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

The demand curves of each monopolistically competitive firm will become more elastic with time and will eventually become perfectly elastic as consumers come to regard the products they produce as homogeneous. This of course leads to a perfectly competitive industry at least in theory.

Answer to Question 2

FALSE