The demand curve faced by the monopolist
A) is perfectly elastic.
B) is perfectly inelastic.
C) slopes downward.
D) slopes upward.

Question

Quizplus · Accepted Answer

The demand curve faced by the monopolist slopes downward because as the price increases, the quantity demanded decreases. A perfectly elastic demand curve would mean that any increase in price would cause the quantity demanded to drop to zero, which is not the case for a monopolist. A perfectly inelastic demand curve would mean that the quantity demanded is constant regardless of the price, which is also not the case for a monopolist. A demand curve that slopes upward is not possible as it would mean that as price increases, the quantity demanded also increases, which is contrary to the law of demand.

The Demand Curve Faced by the Monopolist