Which of the following will determine the elasticity of a dominant firm's demand curve?
A)The dominant firm's marginal cost of production
B)The demand elasticity of the fringe firms
C)The total output in the market
D)The supply elasticity of the fringe firms

Question

Quizplus · Accepted Answer

The elasticity of a dominant firm's demand curve is influenced by the supply elasticity of the fringe firms because it affects how much the fringe firms can increase their output in response to price changes, thereby impacting the dominant firm's market power and demand elasticity.

Which of the Following Will Determine the Elasticity of a Dominant