The Demand Curve Facing the Firm Has Been Estimated as Follows

question 75

Multiple Choice

The demand curve facing the firm has been estimated as follows:

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Which of the following statements about the firm's total revenue is correct?

• A)If the firm sold 3 units of output,it would have revenues totaling $540.
• B)If the firm sold 7 units of output,it would have revenues totaling $560.
• C)If the firm increased output from 2 units to 3 units,total revenue would decline.
• D)If the firm decreased output from 7 units to 6 units,total revenue would decline.
• E)If the firm decreased output from 6 units to 5 units,total revenue would decline.

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Definitions:

Monopolistically Competitive

In a monopolistically competitive market, many firms sell products that are similar but not identical, allowing for competition based on quality, price, and branding.

Long-Run Equilibrium

A state in economics where all factors of production are fully adjusted to market conditions, leading to a steady state where no incentives exist for further adjustment.

Demand Curve

A graphical representation that displays the relationship between the price of a good or service and the quantity demanded by consumers over a period of time.