Question

Compare the elasticity of a monopolistic competitor’s demand with that of a pure competitor and a pure monopolist.

Answer 1

A pure monopolist's demand is less elastic than a monopolist's competitors which is less elastic than a pure competitor.

In monopolistic competition, there is a great deal of nonprice competition, inclusive of advertising, trademarks, and emblem names. In natural competition, there is no nonprice opposition. In a pure monopoly, there is the simplest company. Its product is unique and there aren't any close substitutes.

As there are substitutes, the demand curve facing a monopolistically competitive firm is more elastic than that of a monopoly where there aren't any close substitutes. If a monopolist increases its fee, some purchasers will select no longer purchase its product—however, they will then need to shop for a completely extraordinary product.

The firm's demand curve is fantastically elastic, however no longer perfectly elastic. It's miles greater elastic than the monopoly's demand curve because the vendor has many opponents producing near substitutes; it's far less elastic than the natural competition because the seller's product is differentiated from its rivals.

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