Downward Sloping Curve D

Downward Sloping Curve D - As a result of this the demand...

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Downward Sloping Curve D: In case of a competitive firm, price is given and fixed. Demand or Average Revenue curve is perfectly flexible and is a horizontal straight line. A monopolist has the freedom to charge a higher or lower price. With a change in the price, the quantity demanded also alters. Again a monopolist is a single seller. He himself is a firm as well as an industry. Hence market demand curve is in itself the demand curve of the monopolist.
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Unformatted text preview: As a result of this the demand curve of a monopolist is downward sloping. This has been shown in Figure 40. DD in the figure is the Demand or Average Revenue curve of a monopolist. When the Average Revenue curve falls, the corresponding Marginal Revenue curve also falls and is below the AR curve. The usual law about the behavior of average and marginal quantities governs such a relation between AR and MR....
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