As compared to monopolistic competition, the demand curve in a monopoly is:

Question

Question

This question was previously asked in

SSC CHSL Exam 2024 Tier-I Official Paper (Held On: 01 Jul, 2024 Shift 3)

Answer 1

The correct answer is less elastic

Key Points

In a monopoly, the demand curve is less elastic as compared to monopolistic competition.
This is because a monopolist is the sole provider of a good or service, and thus faces the entire market demand curve.
Monopolistic competition, on the other hand, involves many firms selling differentiated products, leading to more elastic demand curves for individual firms.
Elasticity of demand in monopolistic competition is higher due to the availability of close substitutes, which is not the case in a monopoly.

Additional Information

Monopoly refers to a market structure where a single firm controls the entire market for a product or service.
In a monopoly, the firm has significant control over the price, as there are no close substitutes available.
Monopolistic competition is a type of imperfect competition where many producers sell products that are differentiated from one another.
Examples of monopolistic competition include industries like restaurants, clothing brands, and consumer electronics.
The demand curve in monopolistic competition is more elastic due to the differentiation and availability of alternative products.