A monopolist faces a downward-sloping demand curve because:
A) the demand for its product is inelastic.
B) the industry demand curve is horizontal.
C) resource prices increase as the monopolist expands output.
D) the entire market demand curve is the monopolist's demand curve.

Question

Quizplus · Accepted Answer

A monopolist is the sole producer in the market, therefore, the entire market demand curve becomes the monopolist's demand curve. As the monopolist increases the price of the product, the quantity demanded by customers falls which leads to a downward-sloping demand curve.

A Monopolist Faces a Downward-Sloping Demand Curve Because