Which factors determine the firm's elasticity of demand?

A) Elasticity of market demand and number of firms
B) Number of firms and the nature of interaction among firms
C) Elasticity of market demand, number of firms, and the nature of interaction among firms
D) none of the above

Question

mikala gonzales · Accepted Answer

Final Answer : C, Explanation :  The firm's elasticity of demand is determined by both the elasticity of market demand (i.e. how responsive consumers are to changes in price) and the number of firms operating in the market. The more firms there are, the more competitive the market and the more elastic each firm's demand will be. Additionally, the nature of interaction among firms (e.g. collusion or competition) can also affect the firm's elasticity of demand. Therefore, option C is the most accurate choice.

Which factors determine the firm's elasticity of demand?

A) Elasticity of market demand and number of firms
B) Number of firms and the nature of interaction among firms
C) Elasticity of market demand, number of firms, and the nature of interaction among firms
D) none of the above

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Learning Objectives

Related questions

Which factors determine the firm's elasticity of demand?A) Elasticity of market demand and number of firmsB) Number of firms and the nature of interaction among firmsC) Elasticity of market demand, number of firms, and the nature of interaction among firmsD) none of the above

Definitions

Learning Objectives

Learning Objectives

Related questions

Which factors determine the firm's elasticity of demand?

A) Elasticity of market demand and number of firms
B) Number of firms and the nature of interaction among firms
C) Elasticity of market demand, number of firms, and the nature of interaction among firms
D) none of the above