If a Single Supplier Produces a Good with Many Good

question 62

Multiple Choice

If a single supplier produces a good with many good substitutes, then:

• A) it will have little control over the market price.
• B) the demand curve for its output will be downward sloping.
• C) the price it chooses to set must be less than the market price in order to sell additional output.
• D) the market demand will be perfectly elastic.

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Definitions:

Effective Annual Rate

The annual return on an investment or loan taking compounding into account, expressed as a percentage.

Compounded Annually

This is an interest calculation method where interest is added to the principal once a year.

Effective Rate

The actual interest rate of an investment or loan, taking into account the effects of compounding.

Compounded Semi-Annually

Interest calculation method where the interest is added to the principal sum twice a year, causing the interest to earn interest.