Which of the following firms faces the market demand curve?
A)All firms face the market demand curve.
B)A competitive firm
C)A monopolistically-competitive firm
D)A monopoly
E)No firm faces the market demand curve.

Question

Quizplus · Accepted Answer

A monopoly faces the market demand curve directly because it is the sole provider of a particular good or service in the market, unlike firms in competitive or monopolistically competitive markets, which face a demand curve for their own product that is more elastic due to the presence of substitutes.

Which of the Following Firms Faces the Market Demand Curve