15-2MonoDem - 1 Monopoly Demand Curve Chapter 15-2 The...

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Unformatted text preview: 1 Monopoly Demand Curve Chapter 15-2 The Demand Curve The Demand Curve Facing a Monopoly Firm Facing a Monopoly Firm { In any market, the industry demand curve is downward- sloping . This is the result of the law of demand . Monopolist is the Industry Monopolist is the Industry { Critical to understanding the profit maximization of the monopolist is remembering that the monopolist is the industry because it is the sole producer. { Therefore the monopolist confronts a downward-sloping demand curve. The industry demand curve is the firms demand curve. The Key Difference Between a Monopolist and a Perfect Competitor { A monopolistic firms marginal revenue is not its price { Marginal revenue is always below its price { Marginal revenue changes as output changes and is not equal to the price A monopolistic firms output decision can affect price There is no competition in monopolistic markets so monopolists see to it that monopolists, not consumers, benefit 15-4 Marginal Revenue...
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15-2MonoDem - 1 Monopoly Demand Curve Chapter 15-2 The...

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