Suppose that the demand curve for the XYZ company slopes downward and to the right. Would you conclude that the firm is a price taker or a price maker? Give reasons.
Since, the demand curve of XYZ company is downward sloping, it has to lower its price to sell additional units of output. So, we can conclude that the firm is a price-maker, because a price-taker firm’s demand curve is parallel to the X-axis. But, here nothing is mentioned regarding Elasticity of Demand, hence XYZ company may have full price control (as under monopoly) or partial control over price (as under monopolistic competition).