The demand curve for a monopolistic competitor slopes downward because
a. demand drops to zero after a slight price increase.
b. there are close but not perfect substitutes for the product.
c. customers have no loyalty to the product.
d. the product is undifferentiated.
b
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The demand for luxury suites at basketball games is more elastic if
A) these suites are a necessity. B) these suites are a luxury item. C) few close substitutes exist for these suites. D) basketball fans have little time to look for alternative suites. E) poorer fans cannot afford luxury suites.
The table above gives the demand for a monopolist's output. Between which two quantities is demand elastic?
A) 6 and 5 B) 5 and 4 C) 4 and 3 D) 3 and 2
A government-owned monopoly is more likely to:
A. provide a greater quantity of output than a private one. B. provide output at a lower price than a private one. C. serve public interest than maximize profit. D. All of these statements are true.
Left to itself, a natural monopoly will produce
a. nothing b. the efficient level of output c. the quantity at which marginal cost equals marginal revenue d. the quantity at which the marginal cost and demand curves intersect e. the quantity at which the long-run average total cost and demand curves intersect