Which of the following is true of the demand curve that a monopolist faces?
A)It is perfectly elastic at the equilibrium price level.
B)It is perfectly inelastic at the equilibrium output level.
C)It shows how much the monopolist can sell given the output of the other firms.
D)It is the same as the market demand curve.

Question

Quizplus · Accepted Answer

A monopolist faces the market demand curve directly because it is the sole supplier in the market. Unlike in competitive markets where firms face a perfectly elastic demand at the market price, a monopolist's demand curve is not perfectly elastic or inelastic but rather depends on the overall market demand for the product. Choices A, B, and C do not accurately describe the demand curve a monopolist faces.

Which of the Following Is True of the Demand Curve