Firms that face downward-sloping demand curves for their output in the product market are called
A)price takers.
B)price dictators.
C)monopolists.
D)price makers.

Question

Quizplus · Accepted Answer

Firms that face a downward-sloping demand curve have market power and can set their own price based on their output. Hence, they are called price makers. Price takers, on the other hand, face perfectly elastic demand curves and have no market power to set prices. Monopolists are a specific type of price maker that have complete market power in a market with no close substitutes for their product. Price dictators is not a commonly used term in economics.

Firms That Face Downward-Sloping Demand Curves for Their Output in the Product