Question

Which of the following is true with respect to the demand curve for a monopolistic firm?

Question 5 options:

	The firm's demand curve is perfectly inelastic because consumers have no other options.
	The firm's demand curve is equal to the market demand curve because consumers have no other options.
	The firm's demand curve is perfectly elastic because consumers have no other options.
	none of the above

Answer 1

Correct answer- The firm's demand curve is equal to the market demand curve because consumers have no other options.

In a monopoly market there is only one supplier and the demand and supply of goods determine the prices. When monopolist want to sell more then he decreases its prices.

The demand curve is sloped downward from left to right.

When a monopolist increases its price then he does not loose all customers because the market is huge and he is the only seller.

Basically demand curve of a monopolist is equal to demand curve of firm since he is the only seller.