A monopolist faces a demand curve that
A) is perfectly horizontal at the market price.
B) is below the marginal revenue curve.
C) is downward sloping.
D) coincides with the industry supply.

Question

Quizplus · Accepted Answer

The demand curve facing a monopolist is downward sloping, meaning that as the price increases, the quantity demanded decreases. This is because the monopolist is the sole provider of the good or service and has the ability to control the price. Therefore, the monopolist's demand curve does not coincide with the industry supply, as the monopolist has market power to control its own output and price. The demand curve also typically lies below the marginal revenue curve, as the monopolist must lower the price on all units in order to sell additional units, resulting in a decrease in revenue per unit.

A Monopolist Faces a Demand Curve That