Highly elastic negatively sloped demand curve is related to both monopoly and monopolistic competition.


- In a monopoly market structure, there is a single seller or producer of a particular good or service.
- The demand curve faced by a monopoly is highly elastic and negatively sloped.
- The elasticity of demand measures the responsiveness of the quantity demanded to a change in price.
- In a monopoly, the demand curve is highly elastic because the monopolist faces no competition and can influence the market price by adjusting the quantity supplied.
- If the monopolist raises the price, consumers can easily switch to substitute goods or services, leading to a large decrease in quantity demanded.
- Similarly, if the monopolist lowers the price, consumers will buy more of the good or service, resulting in a large increase in quantity demanded.
- Therefore, the demand curve for a monopoly is highly elastic, meaning that a small change in price leads to a large change in quantity demanded.


- Monopolistic competition is a market structure characterized by many sellers offering differentiated products.
- Each seller has some degree of market power, but there is also a high level of competition.
- The demand curve faced by a firm in monopolistic competition is also highly elastic and negatively sloped.
- This is because firms in monopolistic competition face competition from other sellers offering similar but slightly differentiated products.
- If a firm in monopolistic competition raises its price, consumers can easily switch to a competing product, leading to a large decrease in quantity demanded for that firm's product.
- Similarly, if a firm lowers its price, it can attract more consumers and increase its quantity demanded.
- Therefore, the demand curve for a firm in monopolistic competition is highly elastic, indicating that a small change in price will result in a large change in quantity demanded.


- In both monopoly and monopolistic competition, the demand curve is highly elastic and negatively sloped.
- This means that a small change in price will lead to a large change in quantity demanded.
- However, in perfect competition, the demand curve is perfectly elastic, meaning that the quantity demanded is infinitely responsive to changes in price.
- Thus, the highly elastic negatively sloped demand curve is related to both monopoly and monopolistic competition.