Post Utme Summit University 2017 Commerce Question 36

Practice objective / multiple choice question 36 from the 2017 Post Utme Summit University Commerce examination.

Post Utme Summit University 2017 Commerce Objective / Multiple Choice
Question 36 POST_UTME_SUMMIT_UNIVERSITY • 2017 • COMMERCE • objective

In a monopolistically competitive market, a firm's demand curve is downward-sloping, but the firm still experiences a high degree of price flexibility. What is the primary reason for this price flexibility?

Answer Options

Correct Answer A. The presence of close substitutes for the firm's product
B. The firm's ability to influence the market price through advertising and other promotional activities
C. The firm's ability to adjust its production levels in response to changes in market demand
D. The firm's ability to set a price that is significantly higher than its marginal cost
Correct Answer
A
Correct Option:
The presence of close substitutes for the firm's product

About This Question

This is Post Utme Summit University 2017 Commerce Question 36. It is one of the objective questions from the 2017 Post Utme Summit University Commerce examination.

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