A seller's demand curve will have a steep negative slope when the seller
A)has a low level of market power.
B)has a high level of market power.
C)is in perfect competition.
D)does not have a differentiated product.

Question

Quizplus · Accepted Answer

A seller with a high level of market power will have a steep negative slope on their demand curve because they can relatively easily increase the price of their product without suffering a significant decrease in demand. This is because consumers have few substitutes available and are willing to pay a higher price for the unique product or service offered by the seller. As a result, the seller has more pricing power, resulting in a steeper demand curve.

A Seller's Demand Curve Will Have a Steep Negative Slope