(Figure: Profit Maximization in Monopolistic Competition) Use Figure: Profit Maximization in Monopolistic Competition.In panel (A) of the figure,if the firm raises its price above P,it will _____ customers.

A) lose all of its
B) still have some
C) not lose any
D) gain many new

Question

Jhon Rhovic Talagtag · Accepted Answer

Final Answer : B, Explanation :  In a monopolistically competitive market, firms have some degree of market power due to product differentiation. Therefore, if a firm raises its price above P, it will not lose all its customers because some may remain loyal due to preferences for its unique product features. However, it is likely to lose some customers who find better prices or substitutes elsewhere, indicating it will still have some customers.

(Figure: Profit Maximization in Monopolistic Competition) Use Figure: Profit Maximization in Monopolistic Competition.In panel (A) of the figure,if the firm raises its price above P,it will _____ customers.

A) lose all of its
B) still have some
C) not lose any
D) gain many new

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Learning Objectives

Related questions

(Figure: Profit Maximization in Monopolistic Competition) Use Figure: Profit Maximization in Monopolistic Competition.In panel (A) of the figure,if the firm raises its price above P,it will _____ customers.A) lose all of itsB) still have someC) not lose anyD) gain many new

Definitions

Learning Objectives

Learning Objectives

Related questions

(Figure: Profit Maximization in Monopolistic Competition) Use Figure: Profit Maximization in Monopolistic Competition.In panel (A) of the figure,if the firm raises its price above P,it will _____ customers.

A) lose all of its
B) still have some
C) not lose any
D) gain many new