The demand curve facing a monopolist is:
A)vertical,the same as that facing a perfectly competitive firm.
B)perfectly inelastic,the same as that facing a perfectly competitive firm.
C)upward sloping,the same as that facing a perfectly competitive firm.
D)downward sloping,like the industry demand curve in perfect competition.

Question

Quizplus · Accepted Answer

A monopolist has market power and therefore can set the price for its product. As it raises the price, the quantity demanded by consumers decreases. This gives rise to a downward sloping demand curve which is different from the perfectly competitive market where firms are price takers and face a horizontal demand curve. Therefore, the monopolist faces a downward sloping demand curve, unlike a perfectly competitive firm.

The Demand Curve Facing a Monopolist Is