How does the demand curve facing a home monopolist compare in a no-trade situation to a situation in which a quota protects the monopolist's output?

Question

Quizplus · Accepted Answer

In a no-trade situation, the home monopolist faces the market demand curve for the good, which is downward sloping. When a quota protects the monopolist's output, the quantity of the good supplied by the monopolist is restricted, leading to a higher market price for the good. As a result, the demand curve facing the monopolist shifts to the left, as consumers decrease quantity demanded due to the higher price. Therefore, the quota-protected demand curve lies to the left of the no-trade demand curve.

How Does the Demand Curve Facing a Home Monopolist Compare