it has an inelastic demand
typically, it sells only to a few large buyers
its demand curve is the same as the industry's demand curve
consumers prefer that product
Answer is Wrong!
Answer is Right!
The correct answer is: A. it has an inelastic demand.
A monopolist is the only seller of a good or service in a market. This means that they have a great deal of market power and can set prices without fear of losing customers to competitors. As a result, a monopolist’s demand curve is downward sloping, which means that they can charge a higher price for their product without losing all of their customers.
The other options are incorrect because:
- B. typically, it sells only to a few large buyers is not necessarily true. A monopolist can sell to any number of buyers, large or small.
- C. its demand curve is the same as the industry’s demand curve is also not necessarily true. The industry’s demand curve is the sum of the demand curves of all the firms in the industry, while a monopolist’s demand curve is the demand curve for their product alone.
- D. consumers prefer that product is not necessarily true. Consumers may prefer a product that is sold by a monopolist, but they may also prefer a product that is sold by a competitor.