Question
Under perfect competition, the firm's demand curve is
typically perfectly elastic. However, under certain conditions, it may become negatively sloped. What is the most plausible reason for this change?Solution
Under perfect competition, a firm's demand curve is perfectly elastic. However, if the market structure shifts towards monopolistic competition, the firm's demand curve may become negatively sloped. This is because in monopolistic competition, firms differentiate their products, giving them some market power and allowing them to face a downward-sloping demand curve.
Statement: “My KASSIA” mobile app has been launched by of KASSIA (Karnataka Small Scale Industries Association) to help in faster dissemina...
Statements:
I.             The university officers have decided to conduct last examination every year in March/April in order to a...
A statement is given, followed by two assumptions I and II. You have to consider the statement and two assumptions and decide which of the assumption(s)...
Statement: Automobile majors began the new fiscal on a strong note, posting high double-digit growth in their domestic passenger vehicle sales.
<...Statement: Of the 478 storm water drains identified for clean-up before monsoon in the city, only 167 have been taken up, and work on these is still un...
Statement: Scientists, led by an Indian-origin researcher, have developed artificial bone tissues that could provide new bone marrow for patients needi...
Statement:Â
World Bank doubles funding to $200 billion to tackle climate change, sending an important signal to the wider global community to do...
Statement: The poor identification of vulnerable low lying areas was one of the many factors that led to the massive floods.
Assumption I: A...
Statement: Market trends are changing continuously and with increasing competitiveness, the consumer's demands with respect to the prices and quality ar...
Consider the following statements: Â
Assertion (A): The seeds and saplings should be treated with a germicide.
Reason (R): The seeds and ...
