In a monopolistically competitive market, how does a firm increase the quantity of goods it sells?

Show Answers

It offers a constant quantity of product no matter the price.It needs to increase the price to boost sales volume.It can sell unlimited units at the prevailing market price.It has to reduce the price to sell additional units.

Explanation

In monopolistic competition, firms face a downward-sloping demand curve, meaning they must lower their price to attract more customers and increase sales. Hence, to sell a larger quantity, the firm reduces its price.