A monopolist's demand curve is
A) perfectly elastic.
B) perfectly inelastic.
C) of unit elasticity throughout.
D) the industry demand curve.

Question

Quizplus · Accepted Answer

A monopolist's demand curve represents the market demand for the monopolist's product, therefore it is the industry demand curve. A monopolist can set a price above the marginal cost and still sell the entire output because there are no close substitutes. Therefore, the demand curve is downward sloping but not perfectly elastic or inelastic. It is also not of unit elasticity throughout.

A Monopolist's Demand Curve Is