What does the demand curve facing a monopoly look like? Why?
What will be an ideal response?
The demand curve facing a monopoly is downward sloping because the monopoly is the industry. Therefore, it faces the industry demand curve, which is downward sloping. For a monopolist to sell more units, it must lower price.
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Suppose that Tracy and Pat start a business. Because of a series of bad decisions by Tracy, the company goes bankrupt, owing a total of $50,000. Tracy is penniless and Pat is a millionaire
If the company were organized as a partnership, Pat would be responsible for A) over $1 million of debt. B) $50,000 of debt. C) $25,000 of debt. D) $0 of debt.
The two sources that contribute roughly 80 percent together of total tax revenues are:
A. personal income tax and payroll tax. B. personal income tax and corporate income tax. C. corporate income tax and payroll tax. D. personal income tax and excise tax.
Suppose that the natural unemployment rate is 4.5 percent and the actual unemployment rate is 3.5 percent. Then cyclical unemployment is
A) 1 percent. B) 3.5 percent. C) 8 percent. D) 0 percent. E) -1 percent.
Politicians often instruct households to spend in order to help the economy. This advice overlooks the fact that
a. increases in consumption will make it easier for households to deal with unanticipated future expenses.
b. increases in consumption will provide more loanable funds for investment.
c. you cannot have a strong economy if all or most households are spending just about everything they earn.
d. consumer spending is less than two-thirds of GDP.