Firms that sell commodities on markets that are imperfectly competitive face downward-sloping demand curves.

Question

Quizplus · Accepted Answer

In imperfectly competitive markets, firms have some degree of market power, which means they can influence the price of their product. This results in a downward-sloping demand curve because as a firm raises its price, some consumers will choose not to buy the product, leading to a decrease in quantity demanded.

Firms That Sell Commodities on Markets That Are Imperfectly Competitive