Monopoly firms have downward-sloping demand curves, indicating that they can sell more at lower prices and fewer at higher prices. However, since they are the only supplier in the market, they can control the quantity they sell by setting the price at a level where they can maximize their profits. Hence, they can sell only a limited quantity of output at each price.

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Monopoly Firms Have

Question 82

Multiple Choice

Monopoly firms have

A) downward-sloping demand curves, and they can sell as much output as they desire at the market price.
B) downward-sloping demand curves, and they can sell only a limited quantity of output at each price.
C) horizontal demand curves, and they can sell as much output as they desire at the market price.
D) horizontal demand curves, and they can sell only a limited quantity of output at each price.

Correct Answer: