When a domestic monopolist becomes subject to international competition, it faces:

Question

Quizplus · Accepted Answer

When a domestic monopolist faces international competition, it faces a situation of perfect competition where the demand curve becomes perfectly elastic. This means that any increase in price will result in a significant loss of market share, and any decrease in price will lead to an increase in demand. Therefore, the best answer is C, a perfectly elastic demand curve.

When a Domestic Monopolist Becomes Subject to International Competition, It