Demand in a Monopolistic Market

Demand in a Monopolistic Market - Demand in a Monopolistic...

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Demand in a Monopolistic Market Because the monopolist is the market's only supplier, the demand curve the monopolist faces is the  market demand curve.  You will recall that the market demand curve is  downward sloping , reflecting  the law of demand. The fact that the monopolist faces a downward-sloping demand curve implies  that the price a monopolist can expect to receive for its output will not remain constant as the  monopolist increases its output.  Price-searching behavior.  Unlike a perfectly competitive firm, the monopolist does not have to  simply take the market price as given. Instead, the monopolist is a  price searcher ; it searches the  market demand curve for the  profit maximizing price.  The monopolist's search for the profit  maximizing price involves comparing the marginal revenue and marginal cost associated with each  possible price-output combination on the market demand curve. 
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This note was uploaded on 11/19/2011 for the course ECO 1310 taught by Professor Staff during the Fall '10 term at Texas State.

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