Question

AMITY UNIVERSITY =
Q.9:-If the market demand curve for a commodity has a negative slope then the market structure must be
imperfect competition.
Operfect competition.
monopoly
The market structure cannot be determined from the information given.​

Answer 1

Answer:

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Explanation:

imperfect competition

Answer 2

Answer:

The correct answer to the abovementioned question is option D which states, "The market structure cannot be determined from the information given.​"

Explanation:

The abovementioned question describes a market where the demand curve has a negative slope. However, we can not be sure of the market as the curve often does not depends upon the type of the market. The demand for any product depends mainly upon the consumer's need and satisfaction.

As we are aware that a product is launched in the market considering the following three questions:-

1. What to produce?
2. For whom to produce?
3. How much to produce?

The negative slope of the demand curve depends upon the following reasons:-

• Income and expense ratio of the consumers.
• Price of the commodity,
• Inflation,
• Diminishing marginal utility,
• Substitution effect, etc.

Thus, we can safely conclude that by judging a negative slope of the demand curve we can not determine the market. Hence, option D is the correct option for the abovementioned question.