The market demand curve for a monopolist is typically
A)unitary elastic at the point of profit maximization.
B)downward sloping.
C)horizontal.
D)vertical.

Question

Quizplus · Accepted Answer

The market demand curve for a monopolist is typically downward sloping. This means that as the monopolist increases the price of its product, the quantity demanded by consumers decreases. The monopolist will want to set the price at the point where it can maximize its profits, which will occur where the marginal revenue (the additional revenue generated from selling one more unit) is equal to the marginal cost (the additional cost of producing one more unit). This will result in a lower quantity of goods sold at a higher price, as compared to a perfectly competitive market.

The Market Demand Curve for a Monopolist Is Typically