What shape of demand curves do monopoly firms have,and how much output can they sell
A)They have downward-sloping demand curves, and they can sell as much output as they desire at the market price.
B)They have downward-sloping demand curves, and they can sell only a limited quantity of output at each price.
C)They have horizontal demand curves, and they can sell as much output as they desire at the market price.
D)They have horizontal demand curves, and they can sell only a limited quantity of output at each price.

Question

Quizplus · Accepted Answer

Monopoly firms have downward-sloping demand curves, indicating that consumers are willing to buy less of the good at higher prices. However, since the monopoly is the sole producer, it has the power to set the price and determine the quantity of output to sell. Monopolies will choose the quantity at which marginal revenue equals marginal cost, which will result in a price that exceeds marginal cost. Therefore, they cannot sell as much output as they desire at the market price, but only a limited quantity of output at each price.

What Shape of Demand Curves Do Monopoly Firms Have,and How