Asked by Pavle Watkins on Sep 24, 2024
Verified
A monopoly has
A) A perfectly elastic demand curve
B) A perfectly elastic supply curve
C) An inelastic demand curve
D) A less elastic demand curve than a competitive firm
Perfectly Elastic Demand
A market situation where demand for a product is infinitely sensitive to changes in price, leading to zero consumer tolerance for price increases.
Inelastic Demand
A market condition in which the demand for a product does not significantly change in response to a change in its price.
Less Elastic Demand
A situation where the demand for a product or service is relatively unresponsive to changes in price.
- Understand the relationship between market structure and elasticity of demand and supply curves.
Verified Answer
SO
Sovan Oudom5 days ago
Final Answer :
D
Explanation :
Monopolies face a less elastic demand curve compared to competitive firms because they are the sole providers of a particular product or service, giving consumers fewer alternatives. This means consumers' responsiveness to price changes is lower, making the demand curve less elastic.
Learning Objectives
- Understand the relationship between market structure and elasticity of demand and supply curves.