CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

The demand curve of a monopolist is ______.
A. downward-sloping and above the marginal revenue curve
B. downward-sloping and below the marginal revenue curve
C. identical to the demand curve faced by individual price-taker firms
Explanation: The demand curve of a monopolist looks the same as that of any price-searcher firm, i.e., it is downward-sloping. The marginal revenue curve lies below it, i.e., P > MR, because the firm must cut the price on all units to sell more output.

User Contributed Comments 2

User Comment
danlan For pure competitor, demand curve=MR curve
MattyBo Monopolist: P > MR
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