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Because in order to induce consumers to buy more in a market, price must be reduced. With a lower price, more consumers will be willing and able to purchase the good.
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Under perfect competition is average revenue curve elastic or inelastic?
Under Perfect Competition the demand curve is perfectly elastic. I don't know if that helps but it might
Demand curve slopes downwards from left to right. this is the negative slope that shows the inverse relationship between price and demand. explain why does the demand curve slope downwards?
because demand decreases as price increases :)
How can a company have a downward demand curve but still have marginal revenue equal price?
If the Demand Curve is separate from the MR=P curve, the company can not be of Perfect Competition. It can exist in any other market structure: Monopolistic Competition, Monopoly, or Imperfect Competition. In each of these three structures, the Demand Curve will always fall twice as fast as the MP=P=AR Curve. To answer your question in these terms, the company can have a downward sloping Demand Curve separate from the MR=P curve if it is not in the PC Market Structure.
How would the demand curve of cigarettes?
Demand curve will be perfect inelastic
Why does the demand curve slops downwards?
Because in Economics, the demand curve always goes down. It's always changing because or suppy and demand.
Under perfect competition is average revenue curve elastic or inelastic?
Under Perfect Competition the demand curve is perfectly elastic. I don't know if that helps but it might
Demand curve slopes downwards from left to right. this is the negative slope that shows the inverse relationship between price and demand. explain why does the demand curve slope downwards?
because demand decreases as price increases :)
How can a company have a downward demand curve but still have marginal revenue equal price?
If the Demand Curve is separate from the MR=P curve, the company can not be of Perfect Competition. It can exist in any other market structure: Monopolistic Competition, Monopoly, or Imperfect Competition. In each of these three structures, the Demand Curve will always fall twice as fast as the MP=P=AR Curve. To answer your question in these terms, the company can have a downward sloping Demand Curve separate from the MR=P curve if it is not in the PC Market Structure.
How would the demand curve of cigarettes?
Demand curve will be perfect inelastic
Why does the demand curve slops downwards?
Because in Economics, the demand curve always goes down. It's always changing because or suppy and demand.
Difference between firms's demand curve and industry demand curve in Perfect competition?
Regard the "move-up"s of the whole industry's demand curve as a "dynamic process" at different times. When it happens to intersect with supply curve under perfect competition, we get the equilibrium price and quantity. At this time, firms seem like find their best "time" in the "dynamic process". So during this "time", the price for firms is perfect elastic because neither consumers would buy the product at a higher price nor firms would sell the product at a lower price. To sum up, the difference is -- the firm has a horizontal demand curve while the industry has a down-slope one under perfect competition.
What is the distinctive feature of the demand curve of a firm in pure competition?
The demand curve would be perfectly elastic.
Why is the marginal revenue curve the same as its demand curve?
The marginal revenue curve describes the incremental change in revenue (that is, price*units sold). The MR is not always equivalent to its demand curve. The more perfect competition is, the closer demand approaches the MR. This is because, in perfect competition, firms sell at the MC = MR = P criterion. In the opposite case, monopoly, MR always lies under of demand, and firms achieve monopoly profits by choosing a production quantity where MC = MR and charging a price mark-up.
What is the explanation for the shape of the demand curve?
It is a slope that goes downwards from left to right.
What is wage determination in perfect competition?
?Perfect competition in a resource market means that there aremany small buyers of the resource, and that none can influencethe market. The supply curve is identical to the marginalresource cost curve (MRC), and is horizontal. The wage is givendirectly by the intersection of the supply line and MRP curve(which is the demand for labor).Graph G-MIC9.1
What are demand curve and demand schedule?
a demand curve is a single curve which slopes downwards from left to the right indicating an inverse relationship between price and quantity demanded. a demand schedule is a table which gives the quantity demanded at each range of prices.
What are the demand schedule and the demand curve and how are they related?
i. A demand curve is a single curve which slopes downwards from left to the right indicating an inverse relationship between price and quantity demanded And A demand schedule is a table which gives the quantity demanded at each range of prices.
