A Monopolistic-Competitive Firm in a Market Before Trade Opens
(Figure 6.2)

Figure 6.2 imagines a firm facing monopolistic competition in Japan's national market for compact cars. Since the monopolistically competitive firm faces a downward sloping demand curve, it must lower its price for all units if it plans to sell an additional unit. For this reason, the marginal revenue curve MR1 is below the demand curve and marginal revenue can be negative. Press the "Show MR1" to show the marginal revenue curve on the graph.
Press "Continue" when you are ready to move on. The "Reset" button will clear the graph.