Question

What is the type of demand curve of monopoly?

• A. Inelastic
• B. Elastic
• C. Perfectly elastic
• D. Perfectly inelastic

Hint:

Monopoly = No substitutes = Inelastic demand.

Answer 1

The Correct Option is A

A monopolist is the sole supplier in the market, meaning consumers have no close substitutes for the product. Because of this lack of substitutes, the demand for the monopolist's product is relatively inelastic. This means that changes in price have a less than proportional effect on the quantity demanded. The demand curve for a monopolist is downward sloping and steeper (more inelastic) than in more competitive markets. It is not perfectly inelastic, as consumers can still choose not to buy the product if the price is too high.