In a monopolistically competitive market, the firm's demand curve is _____ due to the availability of close substitutes.

In a monopolistically competitive market, the firm's demand curve is downward sloping because there are many close substitutes available for its product. This means that if a firm raises its prices, consumers can easily switch to a similar product offered by another company. For example, if a local coffee shop increases its prices, customers might choose to go to a nearby café instead, leading to a decrease in the coffee shop's sales. The downward slope indicates that the firm can sell more at lower prices but will sell less if it raises prices. Overall, this characteristic allows firms to have some control over their pricing while still competing with similar products in the market.