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    Downward-sloping industry demand curves

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    Select whether each of the following statements is True or False and explain why.

    Do not forget to give an explanation of why.

    1. When a single seller is confronted in a market by many small buyers, monopsony power enables the buyers to obtain lower prices than those that would prevail in a competitive markets.

    2. A natural monopoly results when the profit-maximizing output level occurs at a point where long-run average costs are declining.

    3. Downward-sloping industry demand curves characterize both perfectly competitive and monopoly markets.

    4. A decrease in the price elasticity of demand would follow an increase in monopoly power.

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    Solution Summary

    Downward-sloping industry demand curves are examined.