Question

Suppose the demand curve for a monopolistic competitor becomes steeper, but its average total costs do not change. What is likely to be an effect?

Answer 1

The demand curve is less elastic.

Step-by-step explanation:

The steeper demand curve shows that the demand had become less elastic because the steeper demand curve represents the less elastic demand while the flatter demand curve shows the more elastic demand. therefore, if the demand curve for a monopolistic competitor becomes steeper that means people are less responsive towards the quantity. So if the price increases or decreases, then people will not change their quantity more than the change in price.