- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 1. The Firm and Market Structures
- Subject 3. Marginal Revenue, Marginal Cost and Profit Maximization
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 |