A Monopolistic Firm Faces a Downward-Sloping Demand Curve Because

question 33

Multiple Choice

A monopolistic firm faces a downward-sloping demand curve because

• A)there are a large number of firms in the industry,all selling the same product.
• B)the demand for its product is always inelastic.
• C)the market price is affected by the amount sold by a monopolistic firm.
• D)marginal revenue is negative throughout the feasible range of output.
• E)the monopolistic firm can exploit economies of scale.

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Definitions:

Earned-Income Tax Credit

A refundable tax credit for low- to moderate-income working individuals and families, aimed at encouraging work and reducing poverty.

Social Security Taxes

Taxes collected by governments from employees and employers to fund the social security system, which provides retirement, disability, and survivor benefits.

Wage Subsidy

A government incentive provided to employers to encourage them to hire more workers by partially subsidizing the wages of employees.

Nonpreferred Workers

Employees or job candidates who may be considered less desirable by employers due to various factors such as lack of experience, education, or specific skills.