The shape of demand curves firms face may change from one form of market structure to another. In addition, there are several factors that influence the nature of firms, including the level of competition they may be involved in, or may not be involved in, at a given period. Barriers also shape the nature of the various forms of market structures.

Why does Walmart have a downward-sloping demand curve while a dairy farmer has a horizontal demand curve? What other suppliers might face a downward-sloping demand curve?

1. How do barriers to entry into and exit from the industry impact the level of competition in a market? What might happen to the market price as greater barriers to entry into and exit from the market come into existence?

 

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1 DownwardSloping Demand Curve for Walmart vs Horizontal Demand Curve for Dairy Farmer Walmart faces a downwardsloping demand curve because it operate... View the full answer