Why AR is more elastic in monopolistic competition than monopoly...???
Dear student,
Under monopolistic competition, demand curve is more elastic. i.e. in response to change in price, change in demand is higher. It is because in a monopolistic competitive market, goods have close substitutes and in a monopoly market goods do not have close substitutes.
Therefore, AR is more elastic in monopolistic competition than monopoly
Regards
Under monopolistic competition, demand curve is more elastic. i.e. in response to change in price, change in demand is higher. It is because in a monopolistic competitive market, goods have close substitutes and in a monopoly market goods do not have close substitutes.
Therefore, AR is more elastic in monopolistic competition than monopoly
Regards