If a company faces competition, its demand at different prices will depend on whether competitors' prices stay constant or change with the company's own prices.

Question

Quizplus · Accepted Answer

This statement is true. If a company's competitors also change their prices in response to the company's price changes, then the demand for the company's products will be affected differently than if the competitors' prices remained constant. The degree of competition, the nature of the product, and other market factors will also influence how much a change in price affects demand.

If a Company Faces Competition, Its Demand at Different Prices