The Demand Curve of a Monopolistically Competitive Firm

question 232

Multiple Choice

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:

Descriptive Economics

The branch of economics that focuses on describing the economies or economic events.

Post Hoc, Ergo Propter Hoc

A logical fallacy that suggests that if one event follows another, the first event must have caused the second.

Fallacy

A mistaken belief, especially one based on unsound argument or reasoning.

Inductive Reasoning

A method of reasoning in which general conclusions are drawn from specific observations or instances.