Which statement accurately describes the relationship between marginal revenue and the demand curve in monopolistic competition?

Show Answers

The demand curve is completely elastic.All products offered are identical.Marginal revenue equals the price of the product.Marginal revenue lies beneath the demand curve and moves away from it.

Explanation

In monopolistic competition, the marginal revenue curve is positioned below the demand curve and diverges from it because firms face a downward-sloping demand. This contrasts with perfectly elastic demand or homogeneous products, where marginal revenue equals price.