Other things being equal,if a formerly competitive firm attains a high degree of monopoly power,its resource demand curve will:
A) become perfectly inelastic.
B) remain perfectly elastic.
C) become more elastic.
D) become more inelastic.

Question

Quizplus · Accepted Answer

With an increase in monopoly power, the firm becomes price setter and can charge a higher price. This leads to a decrease in quantity demanded and an increase in price elasticity of demand. As a result, the firm's resource demand curve becomes more inelastic.

Other Things Being Equal,if a Formerly Competitive Firm Attains a High