Why the AR curve and MR curve of a firm under monopolistic competition is negatively sloped?
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Dear student,

In a monopolistic firm there are large number of sellers selling differentiated products that are close substitutes. Monopolist firm is a price maker.
The AR and MR curve are negatively sloped as there is presence of close substitutes available in this market.
In case of rise in price of one good, the consumer can easily switch his demand to another good.


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as firm can sell only when it lowers its price.thats why its negatively sloped
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