Choose the correct statement from the options given below:The demand curve for an individual supplier in a perfectly competitive market is considered to be downward sloping, whereas the demand curve for a monopoly is considered to be upward sloping.The demand curve for both an individual supplier in a perfectly competitive market and a monopolist is considered to be downward sloping.The demand curve for an individual supplier in a perfectly competitive market is considered to be flat, whereas the demand curve for a monopolist is considered to be downward sloping.The demand curve for an individual supplier in a perfectly competitive market is considered to be flat, whereas the demand curve for a monopoly is considered to be upward sloping.
Question
Choose the correct statement from the options given below:The demand curve for an individual supplier in a perfectly competitive market is considered to be downward sloping, whereas the demand curve for a monopoly is considered to be upward sloping.The demand curve for both an individual supplier in a perfectly competitive market and a monopolist is considered to be downward sloping.The demand curve for an individual supplier in a perfectly competitive market is considered to be flat, whereas the demand curve for a monopolist is considered to be downward sloping.The demand curve for an individual supplier in a perfectly competitive market is considered to be flat, whereas the demand curve for a monopoly is considered to be upward sloping.
Solution
The correct statement is: "The demand curve for an individual supplier in a perfectly competitive market is considered to be flat, whereas the demand curve for a monopolist is considered to be downward sloping."
In a perfectly competitive market, individual suppliers are price takers, meaning they have no control over the price of the product they sell. This is because there are many suppliers selling identical products, so if one supplier tries to charge a higher price, buyers will simply buy from another supplier. This is why the demand curve for an individual supplier in a perfectly competitive market is considered to be flat or perfectly elastic.
On the other hand, a monopolist is the only supplier in the market, so they have control over the price of the product they sell. If they increase the price, the quantity demanded will decrease, but buyers have no other supplier to turn to. This is why the demand curve for a monopolist is considered to be downward sloping.
Similar Questions
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