The demand for an individual firm's output depends on the demand for the industry's output, the number of firms in the industry, and the structure of the industry.

Question

Quizplus · Accepted Answer

The demand for an individual firm's output is influenced by the overall demand for the industry's products, how many firms are competing within that industry, and the market structure (e.g., perfect competition, monopolistic competition, oligopoly, monopoly) which affects pricing, product differentiation, and market power.

The Demand for an Individual Firm's Output Depends on the Demand