Would you expect the demand for a monopolistically competiti

Would you expect the demand for a monopolistically competitive firm\'s product to be more or less elastic than that for a monopolist\'s product? Explain.

Solution

i expect the demand for a monopolistically competitive firm\'s product to be more elastic than that for a monopolist\'s product because elasticity depends on number of substitute goods available. in case of monopolistic competitive firm close substitutes are available as in this market few firms operate which produce differentiated but somewhat variants of same type of good. therefore elasticity is more whereas in case of monoply ,single firm operates and produce a good, no substitute is available so demand for its product is less elastic