Final answer:
The PEN/Faulkner Award recognizes outstanding literary work by living American authors, established by the PEN/Faulkner Foundation to honor excellent American literature irrespective of commercial success.
Step-by-step explanation:
The PEN/Faulkner Award facilitates the recognition of exceptional literary work by living American authors. Spearheaded by the PEN/Faulkner Foundation which was founded in 1980, the award emerged as a response to the shift in the publishing industry which saw the National Book Award favoring bestsellers. This prestigious prize aims to celebrate the best in American literature, without regard to the commercial success of the work. The acronym PEN represents Poets, Essayists, and Novelists, indicating the broad spectrum of writers eligible for this honor.