A firm that must determine the price-output combination that maximizes profit because it faces a downward-sloped demand curve
A) has a perfectly elastic demand curve.
B) has a perfectly inelastic demand curve.
C) is a price-taker.
D) is a price searcher.

Question

Quizplus · Accepted Answer

A firm that faces a downward-sloped demand curve is a price searcher, meaning it has some control over its price because its products are not perfect substitutes for those of other firms. As a result, the firm must determine the price-output combination that maximizes profit.

A Firm That Must Determine the Price-Output Combination That Maximizes