The figure given below shows the revenue and cost curves of a firm. MC represents the marginal cost curve, AC the average cost curve, MR the marginal revenue curve, and AR the average revenue curve.Figure 9.4

-Which among the following does not determine the shape of the demand curve for a good under different market structures?
A)Number of substitutes in the market
B)Importance of the good in a consumer's budget
C)Cost structure of the firm
D)Price-elasticity of demand
E)The length of time being considered

Question

The figure given below shows the revenue and cost curves of a firm. MC represents the marginal cost curve, AC the average cost curve, MR the marginal revenue curve, and AR the average revenue curve.Figure 9.4
 
-Which among the following does not determine the shape of the demand curve for a good under different market structures?
A)Number of substitutes in the market 
B)Importance of the good in a consumer's budget 
C)Cost structure of the firm 
D)Price-elasticity of demand 
E)The length of time being considered

Quizplus · Accepted Answer

The shape of the demand curve for a good under different market structures is determined by factors such as the number of substitutes in the market, importance of the good in a consumer's budget, price-elasticity of demand, and the length of time being considered. However, the cost structure of the firm does not determine the shape of the demand curve for a good. The cost structure of the firm is reflected in the shape of the firm's supply curve, not the demand curve.

The Figure Given Below Shows the Revenue and Cost Curves