A seller's demand curve summarizes its _____, and its marginal revenue curve measures its _____.
A)incentive to increase production; costs of production
B)market share; market power
C)customer power; costs of production
D)market power; incentive to increase production

Question

Quizplus · Accepted Answer

A seller's demand curve shows the relationship between the price of the good and the quantity that the seller is willing to produce and sell at that price, representing its market power. On the other hand, the marginal revenue curve shows the additional revenue the seller would receive from selling one more unit of the good, indicating the seller's incentive to increase production. Therefore, the correct choice is D, which correctly describes the opposite features represented by the two curves.

A Seller's Demand Curve Summarizes Its _____, and Its Marginal