When the number of substitutes increase, the demand curve for a monopolist will
A) not change.
B) become more elastic.
C) become more inelastic.
D) become steeper.

Question

Quizplus · Accepted Answer

As the number of substitutes increases, consumers have more options to choose from, making them more likely to switch to another product if the monopolist raises their price. This makes the demand curve for the monopolist more elastic, meaning that a small change in price will have a larger effect on the quantity demanded.

When the Number of Substitutes Increase, the Demand Curve for a Monopolist