ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The demand curve faced by a perfectly competitive firm is perfectly elastic, meaning it can sell all the output it wishes at the prevailing market price. The demand curve faced by a monopoly is the market demand. It can sell more output only by decreasing the price it charges.

Detailed explanation-2: -The demand curve for a monopoly firm is downward sloping as any increase in price will cause the quantity demanded to decline. However, it is not horizontal as in the case of perfect competition because the goods have no perfect substitutes and the monopoly firm is the sole producer of the good.

Detailed explanation-3: -In case of monopolistic competition, the demand is more elastic as competition is more i.e. products have more substitutes. Hence, the demand curve is flatter.

Detailed explanation-4: -The market demand curve for the goods and services in a perfectly competitive market is downward sloping. However, no single firm in this market can influence the price at which it sells its output.

Detailed explanation-5: -The monopolist is the only seller in a monopolistic market. Hence, its demand curve is the same as the market demand curve for the product it sells. Moreover, the monopolist’s demand curve is the same as its average revenue curve. This is because it charges an equal price for each unit sold.