(a) The demand curve facing a producer under monopolistic competition is downward sloping as shown by the demand curve DD in the diagram. A producer in such a market can increase his sales by reducing his price. Quantity demanded i.e. sale can be increased by MM1 if price is reduced by PP1.
(b) The demand curve is more elastic as the differentiated products are close substitutes of each other.
(c) Number of firms is large.
