Compared to perfectly competitive firms, the demand curve for a monopolist will be
A) as elastic.
B) more elastic.
C) less elastic.
D) perfectly elastic.

Question

Quizplus · Accepted Answer

The demand curve for a monopolist is less elastic compared to perfectly competitive firms. This is because a monopolist has market power and is the sole supplier of a good or service, hence it can increase the price without losing all its customers. In contrast, a perfectly competitive firm has no market power, hence it has to sell its output at the market price, resulting in a more elastic demand curve.

Compared to Perfectly Competitive Firms, the Demand Curve for a Monopolist