Question
In which market structure is the demand curve of the market represented by the demand curve of the firm ?
Answer: Option B
Answer: (b)
Because the monopolist is the market's only supplier, the demand curve the monopolist faces is the market demand curve.
The market demand curve is downward sloping, reflecting the law of demand.
The fact that the monopolist faces a downward-sloping demand curve implies that the price a monopolist can expect to receive for its output will not remain constant as the monopolist increases its output.
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Answer: (b)
Because the monopolist is the market's only supplier, the demand curve the monopolist faces is the market demand curve.
The market demand curve is downward sloping, reflecting the law of demand.
The fact that the monopolist faces a downward-sloping demand curve implies that the price a monopolist can expect to receive for its output will not remain constant as the monopolist increases its output.
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