The monopolist faces:
A) a perfectly inelastic demand curve.
B) a perfectly elastic demand curve.
C) the entire market demand curve.
D) all of the above.

Question

Quizplus · Accepted Answer

A monopolist faces the entire market demand curve because they are the sole producer in the market and thus, their actions will impact the overall demand for the product. A perfectly inelastic demand curve implies that a change in price does not affect the quantity demanded, which is not true in the case of a monopolist. A perfectly elastic demand curve implies that consumers have alternative products available at the same price, which is also not true in the case of a monopolist.

The Monopolist Faces