If the Demand Curve Faced by a Firm Is Downward

question 117

Multiple Choice

If the demand curve faced by a firm is downward sloping, we can reasonably believe that the

• A) firm can influence the price of the product it sells.
• B) firm will have no effect on the price of the product it sells.
• C) firm's contributions to total output of the product is insignificant.
• D) firm has no control over the price of the product it sells but can vary the output.
• E) firm must lower prices if it hopes to increase its profits.

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Definitions:

Proprietorships

A sole proprietorship is a type of business entity that is owned and operated by one individual, with no legal distinction between the owner and the business.

Services

Economic activities offered by one party to another, often involving the provision of expertise or labor.

Corporation

A legal entity that is separate and distinct from its owners, recognized as a person under law, capable of rights, duties, and holding property.

Legally Separate

A term used to describe entities that are recognized as distinct legal entities under the law, capable of entering into agreements and holding assets independently.