The market demand curve of a particular good is downward-sloping. Based on this
ID: 1119981 • Letter: T
Question
The market demand curve of a particular good is downward-sloping. Based on this information, which of the following statements is correct regarding a price- taking firm producing that good? 9. Select one answer a. The demand curve faced by the firm is downward-sloping b. The firm chooses the price that equals its marginal cost c. The firm chooses its output such that the marginal cost equals the price. d. A price-taking firm cannot be profit-maximizing. IE 10. The following diagram shows the consumer and producer surplus in the market for bread.Explanation / Answer
The correct option is (C).
if there is downward sloping curve and price taking firm then firm will choose the output level where price equal to marginal cost.
in perfect competition profit maximization output is where
P=MC
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