The demand curve for a monopoly's product is A. more inelastic than the market demand for the product. B. undefined. C. the market demand for the product. D. more elastic than the market demand for the product.

Question

Arjun Jackson

Business

15 June, 12:35

The demand curve for a monopoly's product is A. more inelastic than the market demand for the product. B. undefined. C. the market demand for the product. D. more elastic than the market demand for the product.

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Answers (1)

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Ally Dixon · Answer 1

C. The market demand for the product

Explanation:

Monopoly is a market situation whereby the market is characterized with having a single seller and multiple buyers. Here, the seller faces no competition as he is the only one selling that particular product in the market. The monopolist faces a downward sloping market demand curve. As a result, as the monopolist increases its output, for every additional unit of output, the process must fall. Thus, leasing to the consequent fall in the marginal revenue. Thos os because, since he is the only sellers in order to sell more outputs he must reduce the prices oer each output.