Everything else equal, the more rivals a firm has, the
A)less kinked is its demand curve.
B)closer is its equilibrium price to its average variable costs.
C)more differentiated is its product from rivals' products.
D)more elastic is its demand curve.

Question

Quizplus · Accepted Answer

When a firm has more rivals, the consumers have more options to choose from, making the demand for the firm's product more elastic. This means that a small change in price is likely to cause a larger change in quantity demanded by consumers, making the demand curve more elastic.

Everything Else Equal, the More Rivals a Firm Has, the