Q12.3 Why are both industry and firm demand curves downward sloping in monopoly markets?
Q12.3 ANSWER
In monopoly, the firm is the industry. Thus, firm and industry demand and supply curves are identical. The monopoly demand curve will be downward sloping, like all industry demand curves, because this output must, to a greater or lesser degree, compete with all goods and services for a share in the consumer's market basket. The diminishing marginal utility associated with the consumption of all goods and services will ensure that the industry demand curve is downward sloping for all products.