CA Foundation Exam  >  CA Foundation Questions  >  Suppose that the demand curve for the XYZ Co.... Start Learning for Free
Suppose that the demand curve for the XYZ Co. slopes downward and to the right. We can conclude that
  • a)
    the firm operates in a perfectly competitive market.
  • b)
    the firm can sell all that it wants to at the established market price.
  • c)
    the XYZ Co. is not a price taker in the market because it must lower price to sell additional units of output.
  • d)
    the XYZ Co. will not be able to maximise profits because price and revenue are subject to change.
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Suppose that the demand curve for the XYZ Co. slopes downward and to t...
Explanation:

The demand curve for the XYZ Co. slopes downward and to the right, which means that as the price of the product decreases, the quantity demanded increases. This indicates that the XYZ Co. is not a price taker in the market because it cannot sell all that it wants to at the established market price. In other words, if the XYZ Co. wants to sell more units of output, it must lower the price to increase demand.

Under this scenario, the correct answer is option 'C' which states that the XYZ Co. is not a price taker in the market because it must lower price to sell additional units of output. This is because the XYZ Co. has some market power to influence the price of its product due to the downward sloping demand curve.

Other options can be eliminated as follows:

- Option 'A': The fact that the demand curve slopes downward and to the right does not necessarily mean that the firm operates in a perfectly competitive market. Perfectly competitive markets have a horizontal demand curve, indicating that firms are price takers.
- Option 'B': The fact that the demand curve slopes downward and to the right does not necessarily mean that the firm can sell all that it wants to at the established market price. If the firm wants to sell more units of output, it must lower the price to increase demand.
- Option 'D': The fact that the price and revenue are subject to change does not necessarily mean that the XYZ Co. will not be able to maximize profits. The XYZ Co. can still maximize profits by producing at the level where marginal cost equals marginal revenue, which is where the demand curve intersects the marginal cost curve.
Explore Courses for CA Foundation exam

Top Courses for CA Foundation

Suppose that the demand curve for the XYZ Co. slopes downward and to the right. We can conclude thata)the firm operates in a perfectly competitive market.b)the firm can sell all that it wants to at the established market price.c)the XYZ Co. is not a price taker in the market because it must lower price to sell additional units of output.d)the XYZ Co. will not be able to maximise profits because price and revenue are subject to change.Correct answer is option 'C'. Can you explain this answer?
Question Description
Suppose that the demand curve for the XYZ Co. slopes downward and to the right. We can conclude thata)the firm operates in a perfectly competitive market.b)the firm can sell all that it wants to at the established market price.c)the XYZ Co. is not a price taker in the market because it must lower price to sell additional units of output.d)the XYZ Co. will not be able to maximise profits because price and revenue are subject to change.Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Suppose that the demand curve for the XYZ Co. slopes downward and to the right. We can conclude thata)the firm operates in a perfectly competitive market.b)the firm can sell all that it wants to at the established market price.c)the XYZ Co. is not a price taker in the market because it must lower price to sell additional units of output.d)the XYZ Co. will not be able to maximise profits because price and revenue are subject to change.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Suppose that the demand curve for the XYZ Co. slopes downward and to the right. We can conclude thata)the firm operates in a perfectly competitive market.b)the firm can sell all that it wants to at the established market price.c)the XYZ Co. is not a price taker in the market because it must lower price to sell additional units of output.d)the XYZ Co. will not be able to maximise profits because price and revenue are subject to change.Correct answer is option 'C'. Can you explain this answer?.
Solutions for Suppose that the demand curve for the XYZ Co. slopes downward and to the right. We can conclude thata)the firm operates in a perfectly competitive market.b)the firm can sell all that it wants to at the established market price.c)the XYZ Co. is not a price taker in the market because it must lower price to sell additional units of output.d)the XYZ Co. will not be able to maximise profits because price and revenue are subject to change.Correct answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation. Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of Suppose that the demand curve for the XYZ Co. slopes downward and to the right. We can conclude thata)the firm operates in a perfectly competitive market.b)the firm can sell all that it wants to at the established market price.c)the XYZ Co. is not a price taker in the market because it must lower price to sell additional units of output.d)the XYZ Co. will not be able to maximise profits because price and revenue are subject to change.Correct answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Suppose that the demand curve for the XYZ Co. slopes downward and to the right. We can conclude thata)the firm operates in a perfectly competitive market.b)the firm can sell all that it wants to at the established market price.c)the XYZ Co. is not a price taker in the market because it must lower price to sell additional units of output.d)the XYZ Co. will not be able to maximise profits because price and revenue are subject to change.Correct answer is option 'C'. Can you explain this answer?, a detailed solution for Suppose that the demand curve for the XYZ Co. slopes downward and to the right. We can conclude thata)the firm operates in a perfectly competitive market.b)the firm can sell all that it wants to at the established market price.c)the XYZ Co. is not a price taker in the market because it must lower price to sell additional units of output.d)the XYZ Co. will not be able to maximise profits because price and revenue are subject to change.Correct answer is option 'C'. Can you explain this answer? has been provided alongside types of Suppose that the demand curve for the XYZ Co. slopes downward and to the right. We can conclude thata)the firm operates in a perfectly competitive market.b)the firm can sell all that it wants to at the established market price.c)the XYZ Co. is not a price taker in the market because it must lower price to sell additional units of output.d)the XYZ Co. will not be able to maximise profits because price and revenue are subject to change.Correct answer is option 'C'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Suppose that the demand curve for the XYZ Co. slopes downward and to the right. We can conclude thata)the firm operates in a perfectly competitive market.b)the firm can sell all that it wants to at the established market price.c)the XYZ Co. is not a price taker in the market because it must lower price to sell additional units of output.d)the XYZ Co. will not be able to maximise profits because price and revenue are subject to change.Correct answer is option 'C'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
Explore Courses for CA Foundation exam

Top Courses for CA Foundation

Explore Courses
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev