Question

In a monopoly market, Select one: a. other firms have no incentive to enter the market. b. profits will always be positive because the firm is the only supplier in the market. c. the demand facing the firm is downward-sloping because it

Answer 1

Answer: Option (c) is correct.

Explanation:

Correct option: The demand facing the firm is downward-sloping because it is the market demand.

In a monopoly market conditions, there is a single seller in the market and the monopolist firm is price setter. But the demand curve faced by the monopoly firm is downward sloping because monopolist is a single firm who is operating in the market and there is a need to reduce prices if he wants to sell an additional units.