Respuesta :
In a monopolistically competitive industry, when a business faces a downward-sloping demand curve, it will choose a combination of quantity and price to maximize its profit.
What is a monopolistically competitive industry?
- A monopoly is a firm that is distinguished by a lack of competition in a market and the absence of substitutes for its product.
- Monopolies can impose price increases and create barriers to entry into the market.
- When several companies offer competing products or services that are similar but not perfect alternatives, monopolistic competition develops.
- In a monopolistic competitive industry, the barriers to entry are low, and the decisions of any one firm have no direct impact on its competitors.
- When a business encounters a downward-sloping demand curve in a monopolistically competitive industry, it will choose a mix of quantity and price to optimize its profit.
Therefore, in a monopolistically competitive industry, when a business faces a downward-sloping demand curve, it will choose a combination of quantity and price to maximize its profit.
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The complete question is given below:
In a monopolistically competitive industry, when a business faces a ________ demand curve, it will choose a combination of quantity and ________ to maximize its profit.
