Refer to the accompanying figure to answer the following questions.

-The demand curve for Arnold's Airport Shuttle is downward sloping.With only this information,it can be concluded that Arnold's Airport Shuttle
A) is the only firm in the market for airport shuttles.
B) is currently maximizing profits.
C) is a price maker.
D) makes economic profits.
E) should produce where the demand curve crosses marginal cost.

Question

Refer to the accompanying figure to answer the following questions.
 
-The demand curve for Arnold's Airport Shuttle is downward sloping.With only this information,it can be concluded that Arnold's Airport Shuttle
A) is the only firm in the market for airport shuttles. 
B) is currently maximizing profits. 
C) is a price maker. 
D) makes economic profits. 
E) should produce where the demand curve crosses marginal cost.

Quizplus · Accepted Answer

The fact that the demand curve is downward sloping indicates that Arnold's Airport Shuttle has some degree of market power and can influence the price of its services, making it a price maker. This does not necessarily mean that it is the only firm in the market or currently maximizing profits, or that it is making economic profits. The optimal production level would depend on the intersection of the demand curve and the marginal cost curve, but we do not have information about the latter.

Refer to the Accompanying Figure to Answer the Following Questions