Monopoly firms have:
A)horizontal demand curves and can sell only a limited amount at each price
B)horizontal demand curves and can sell as much as they want at each price
C)downward-sloping demand curves and can sell as much as they want at each price
D)downward-sloping demand curves and can sell only a limited amount at each price

Question

Quizplus · Accepted Answer

Monopoly firms face a downward-sloping demand curve as they are the sole provider of the product in the market. However, they can only sell a limited amount at each price because as they increase the price of the product, the quantity demanded decreases. Thus, they have to make a trade-off between the price and the quantity they can sell.

Monopoly Firms Have