The demand curve faced by a monopolistically competitive firm

A) is more elastic than the monopolist's demand curve.
B) is less elastic than the monopolist's demand curve.
C) will shift outward as new firms enter the industry.
D) is more elastic than the demand curve faced by the purely competitive firm.

Demand Curve

A graph showing the relationship between the price of a good or service and the quantity demanded by consumers.

Monopolistically Competitive

Pertaining to a market scenario where firms engage in monopolistic competition, each firm has some control over its price because its product is different from those of its competitors.

Elasticity

A measure of the sensitivity of one variable to changes in another, commonly used to assess changes in demand or supply in response to changes in prices or income.