A monopoly firm faces a ________ for his product.

negatively sloped demand curve

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demand curve which is parallel to X-axis

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demand curve which is parallel to Y-Axis

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none of above

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Solution

The correct option is A negatively sloped demand curve
The monopolist faces a downward sloping demand curve for its product because they are price makers in the industry as they are the sole producer in the market and control the industry supply. In order to be able to sell additional output the monopolist will have to lower its price and marginal revenue will fall.

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