Question

How is the perceived demand curve for a

monopolistically competitive firm different from

the perceived demand curve for a monopoly or a perfectly competitive firm?

Short answer

The curve of monopolistically competitive market is very elastic and the curve of monopoly is sloping downwards.

Step-by-step solution

Step 1.monopolistic competition curve and monopoly curve.

MONOPOLISTIC COMPETITION

MONOPOLY

Step 2. Explanation

The percieved demand curve of a monopoly firm is a downward sloping demand curve resulting from the seller being the price maker.

A monopolistic firm on the othe rhand faces a perfectly elastic demand curve, horizontal line parallel to the x-axis. This is because such firms can sell any quantity at the given price.