What is the shape of demand curve Mcq?

Solution(By Examveda Team)

Normally a demand curve will have downward sloping shape. The demand curve is downward sloping, indicating the negative relationship between the price of a product and the quantity demanded.

What is the shape of the demand curve?

Shape of the demand curve

The demand curve typically slopes downward due to the law of demand, which states that there is an inverse proportional relationship between price and demand of a commodity. The constant a embodies the effects of all factors other than price that affect demand.

What is demand curve Mcq?

A demand curve graph depicts the relationship between the price of a commodity (the y-axis) and the quantity of that commodity that is demanded at that price (the x-axis). The demand curve will shift to left or right as a result of the change in any nonprice determinant of demand.

What is the shape of demand curve under perfect competition Mcq?

Solution. Under perfect competition, the shape of demand curve of a firm is Horizontal.

Why is the shape of the demand curve curved?

Demand curves slope downwards because of the notion of declining marginal utility - the more of something that one has consumed, the less benefit (and, therefore, the less they are willing to pay) for the next unit of the good in question.

Test 19: A Level Economics: MCQ Revision on Microeconomics

Is demand curve convex or concave?

Most frequently, the demand curve shows a concave shape. However, in many economics textbooks, we can also see the demand curve as a straight line. The demand curve is drawn against the quantity demanded on the x-axis and the price on the y-axis.

Why does demand curve slope downward Mcq?

Demand curve slopes downward because of the law of Diminishing marginal utility. The law of diminishing marginal utility states that with each increasing quantity of the commodity, its marginal utility declines.

What is the shape of demand curve of perfect competition?

A perfectly competitive firm's demand curve is a horizontal line at the market price. This result means that the price it receives is the same for every unit sold.

What is the shape of demand curve under the perfect competition class 11?

Firm's demand curve under perfect competition is a horizontal straight line parallel to X-axis.

What is the shape of demand curve under monopolistic competition?

The perceived demand curve for a monopolistically competitive firm is downward-sloping, which shows that it is a price maker and chooses a combination of price and quantity.

What is demand in economics Mcq?

The Demand for goods or services is defined as the desire of a consumer to purchase that commodity. The Supply of goods or services is the overall availability of that commodity in the market.

Is the demand curve always downward sloping?

The law of demand explains the functional relationship between the price of a commodity and its demand. The most important tool that explains this relationship is the demand curve. This curve is always downward sloping due to an inverse relationship between price and demand.

Why is the demand curve downward sloping?

When the prices of the goods fall the old buyers tend to buy more goods than usual thereby increasing its demand. This causes the downward sloping of demand curve.

What is the shape of demand curve under oligopoly?

Answer: In an oligopolistic market, the kinked demand curve hypothesis states that the firm faces a demand curve with a kink at the prevailing price level. The curve is more elastic above the kink and less elastic below it. This means that the response to a price increase is less than the response to a price decrease.

How is the shape of demand as per the law of demand?

The law of demand states that as the price of a good decreases, the quantity demanded of that good increases. In other words, the law of demand states that the demand curve, as a function of price and quantity, is always downward sloping.

What is the shape of the demand curve of an individual firm in pure and perfect competition?

A perfectly competitive firm faces a demand curve is a horizontal line equal to the equilibrium price of the entire market.

Why is the demand curve for a perfect competition horizontal?

Therefore, perfect competition firms will exhibit a horizontal line in its individual demand curve, because exact substitutes are available in the market. Additionally, the prices of the other products or substitutes will be lower than the firm's product, forcing the buyers to purchase the alternatives.

Why is demand curve flat in perfect competition?

In the case of the perfect competition model, since sellers are price takers and their presence in the market is of small consequence, the demand curve they see is a flat curve, such that they can produce and sell any quantity between zero and their production limit for the next period, but the price will remain ...

What is a flat demand curve?

If the curve is not steep, but instead is shallow, then the good is said to be “elastic” or “highly elastic.” This means that a small change in the price of the good will have a large change in the quantity demanded. If the curve is perfectly flat (horizontal), then we say that it is perfectly elastic.

What is horizontal demand curve?

A perfectly elastic demand curve is represented by a straight horizontal line and shows that the market demand for a product is directly tied to the price. In fact, the demand is infinite at a specific price. Thus, a change in price would eliminate all demand for the product.

What is firm demand curve?

Firm's demand curve is a curve showing relationship between price of the product and its quantity demanded in the market. We know that price = AR. AR curve shows the relationship between price and output. So, we can say that firm's demand curve is the same as AR curve of the firm. It is also called firm's price line.

What is the slope of demand curve Mcq?

Solution: An individual demand curve slopes downward to the right because of the Working of the law of diminishing marginal utility, Substitution effect of decrease in price and Income effect of fall in price.

What is the slope of demand curve?

The slope of a demand curve, for example, is the ratio of the change in price to the change in quantity between two points on the curve. The price elasticity of demand is the ratio of the percentage change in quantity to the percentage change in price.

Why does demand curve slope upward?

People sometimes talk about upward-sloping demand curves occurring as a result of conspicuous consumption. Specifically, the high prices increase the status of a good and make people demand more of it.

What is concave demand curve?

A steep demand curve means that price reductions only increase quantity demanded slightly, while a concave demand curve that flattens as it moves from left to right reveals an increase in quantity demanded when low prices drop even slightly lower.