Question

The only relevant difference between the curves for a monopoly and the equivalent ones for a firm in a competitive market is that?

Answer 1

The only relevant difference between the curves for a monopoly and the equivalent ones for a firm in a competitive market is that marginal and average revenue slope downward for the monopolist.

What type of curve does a monopoly have?

• A monopoly encounters a downward-sloping market demand curve in Panel (b).
• It chooses its profit-maximizing output in its capacity as a profit maximizer.
• However, after determining that quantity, it uses the demand curve to determine the price at which it can sell that output.

What is a difference between a monopoly and perfect competition ?

While in monopolistic competition, businesses produce slightly different goods, in perfect competition, businesses produce identical goods.

How does a demand curve for a monopoly differ from a demand curve for a perfectly competitive firm?

Because the monopolist is the sole company operating in the market, its demand curve is identical to the market demand curve, which is downward-sloping as opposed to the demand curve for a perfectly competitive firm.

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