Which Is True About the Demand Curve of a Monopolistically

question 247

Multiple Choice

Which is true about the demand curve of a monopolistically competitive firm?

• A)Is horizontal because the firm must cut its price to sell more.
• B)Is perfectly elastic.
• C)Is downward sloping because it sells an identical product.
• D)Is downward sloping because it must cut its price to sell more.

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Definitions:

Capital Intensity Ratio

A measure of how much capital is needed in relation to labor to produce a given level of output.

Operating Capacity

The maximum output a company can produce using its resources efficiently under normal conditions.

Net Fixed Assets

The value of a company’s property, plant, and equipment minus any depreciation that has been accounted for.

Larger Population

A term referring to a broader group of individuals or observations from which a sample is drawn for research purposes.