Which of the Following Is True About the Demand Curve

question 41

Multiple Choice

Which of the following is true about the demand curve facing the dominant firm?

• A) It equals market demand minus fringe firms' supply curve.
• B) It is identical to market demand.
• C) It equals market demand minus demand facing the fringe firms.
• D) It is horizontal.

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Definitions:

Useful Life

The estimated duration of time an asset is expected to be useful for the business before it becomes obsolete or too costly to maintain.

Operating Cost

Expenses associated directly with the day-to-day running of a business, including costs for materials, labor, and utilities.

Value-Based Pricing

A pricing strategy where the price of a product or service is determined by the perceived value it brings to the customer rather than its cost of production or market competition.

Absorption Costing

An accounting formula that rolls in every cost incurred in manufacturing—direct materials, direct labor, and both variable and fixed manufacturing overhead—into the product’s final cost.