50. If SteveR Incorporated is a monopolistic producer of diamonds, the firm's demand curve is down-
ward sloping because

(A) the number of diamonds SteveR Incorporated
offers for sale affects the price of diamonds
(B) marginal revenue is negative throughout the
range of the demand curve
(C) marginal revenue is positive throughout the
range of the demand curve
(D) the diamond industry consists of a few firms
selling similar diamonds
(E) the demand for diamonds is inelastic

(A) the number of diamonds SteveR Incorporated offers for sale affects the price of diamonds.

Explanation:

A monopoly is a market structure which is typically characterized by a single-seller who sells a unique product in the market by dominance. This ultimately implies that, it is a market structure wherein the seller has no competitor because he is solely responsible for the sale of unique products without close substitutes. Any individual that deals with the sales of unique products in a monopolistic market is generally referred to as a monopolist.

If SteveR Incorporated is a monopolistic producer of diamonds, the demand curve of the business firm would slope downwards because the number of diamonds that are being offered for sale by SteveR Incorporated affects the price of diamonds in the market.

This ultimately implies that, SteveR Incorporated will charge a price that is higher than the marginal cost i.e price exceeding the marginal cost.

Marginal cost can be defined as the additional or extra cost that is being incurred by a company as a result of the production of an additional unit of a product or service.

Generally, marginal cost can be calculated by dividing the change in production costs by the change in level of output or quantity.

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