Demand and Marginal Revenue Curves Are Downward-Sloping for Monopolistically Competitive

question 275

Multiple Choice

Demand and marginal revenue curves are downward-sloping for monopolistically competitive firms because

• A)each firm has to take the market price as given.
• B)product differentiation allows each firm some degree of monopoly power.
• C)there are a few large firms in the industry and they each act as a monopolist.
• D)mutual interdependence among all firms in the industry leads to collusion.