In a competitive market structure the firms face an elastic demand curve. The monopolist on the other hand faces a demand curve that is somewhat inelastic in nature. So we can see that the elasticity of the demand curve faced by a firm can indicate the type of market the firm operates in. The way the demand for the product is affected by the price of the close substitute also gives us an idea whether the firm has any close competitor or not. The demand function and the elasticities that we have obtained from the regression analysis can provide Continue reading...