The demand curve a monopolist uses in making an output decision is
A)the same as the demand curve facing a perfectly competitive firm
B)vertical because there are no close substitutes for its product
C)horizontal because there are no close substitutes for its product
D)the same as the market demand curve
E)perfectly inelastic

Question

Quizplus · Accepted Answer

A monopolist faces the entire market demand curve because it is the sole producer of the product, unlike a perfectly competitive firm which faces a horizontal demand curve.

The Demand Curve a Monopolist Uses in Making an Output