Question

A monopolist has market power because it Group of answer choices none of the Answers are Correct. Faces a downward-sloping demand curve for its own output. Is a price taker. Is regulated by the government. Can raise price as much as it wishes and not lose any customers.

Answer 1

A monopolist has market power because it faces a downward-sloping demand curve for its own output.

A monopolist has market power because he is a price maker and not a price taker.

• A monopolist undergoes a downward-sloping demand curve for its own output.
• When a firm, primarily in a monopoly, increases its market price by decreasing its output, it exerts its price-making abilities.
• As a price maker, a monopoly will always face a downward-sloping demand curve.
• A downward-sloping demand curve indicates that a greater quantity of a commodity would be demanded when the price is lower.
• A monopolist has more leeway in determining the output and prices.
• Since, a monopolist has market power, they determine the price of the commodity, facing a downward-sloping demand curve at all times.

Therefore, a monopolist has market power because it faces a downward-sloping demand curve for its own output.

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