The figure given below shows the cost and revenue curves of a monopolist.Figure 11.9
D: Average revenue
MR: Marginal revenue
ATC: Average total cost
MC: Marginal cost
-The major similarity between a monopolist and a monopolistically competitive firm is that:
A)both are price takers.
B)both face a horizontal demand curve.
C)both are the sole producers of a particular good.
D)both face a negatively sloped demand curve.
E)both are affected by the decision of their rivals.

Question

The figure given below shows the cost and revenue curves of a monopolist.Figure 11.9
  D: Average revenue
MR: Marginal revenue
ATC: Average total cost
MC: Marginal cost
-The major similarity between a monopolist and a monopolistically competitive firm is that:
A)both are price takers. 
B)both face a horizontal demand curve. 
C)both are the sole producers of a particular good. 
D)both face a negatively sloped demand curve. 
E)both are affected by the decision of their rivals.

Quizplus · Accepted Answer

Both monopolists and monopolistically competitive firms face a downward-sloping demand curve, which means they have the power to increase their prices by reducing their output. This is different from a price taker, who must accept the market price as given. Both types of firms also have control over the quantity they produce, unlike a perfectly competitive firm. However, monopolists are the sole producers of a particular good, while monopolistically competitive firms face competition from similar but slightly differentiated products.

The Figure Given Below Shows the Cost and Revenue Curves