Principles of Microeconomics / Unit 9 MIC 0804 short lesson, about 20 seconds
The Perceived Demand Curve
Captions available
The idea
A monopolistic competitor faces a downward-sloping demand curve for its own variety, one slice of the market, and more elastic than a monopolist's because close substitutes exist.
In practice
Raise the pizza price a little and some customers stay; raise it a lot and most leave.
Where people slip
It is not the market demand curve. Rivals' choices move it, which a monopolist's never do.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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