The demand curve for a monopoly is:
A)the sum of the supply curves of all of the firms in the monopoly's industry.
B)the industry demand curve.
C)horizontal because no one can enter.
D)perfectly elastic.

Question

Quizplus · Accepted Answer

The demand curve for a monopoly is the industry demand curve because the monopoly firm is the only supplier in the industry, and thus the demand curve is based solely on the firm's pricing decisions. Option A is incorrect because there are no other firms in the market. Option C is incorrect because a monopoly can block entry by maintaining high barriers to entry, but the demand curve is not necessarily horizontal. Option D is incorrect because a monopoly's demand curve is downward sloping, meaning that as price increases, the quantity demanded decreases.

The Demand Curve for a Monopoly Is