Question

Which of the following is not true for monopoly market

• A. It has one player
• B. Demand curve is flat
• C. High barriers to entry
• D. Price controlled by seller

Hint:

Demand Curve Shapes:
- Perfect Competition: Perfectly Elastic (Flat, Horizontal)
- Monopoly: Inelastic Downward-sloping
- Monopolistic Competition: Elastic Downward-sloping

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
A monopoly is a market structure characterized by a single seller of a product with no close substitutes.
This structure shapes market pricing and firm demand curves.
Detailed Explanation:
Let us analyze the characteristics of a monopoly market:
- One player: By definition, a monopoly consists of a single firm dominating the entire market.
Thus, Option (A) is true.
- High barriers to entry: Strict legal, structural, or financial barriers prevent competitors from entering.
Thus, Option (C) is true.
- Price controlled by seller: Because the monopolist is the sole supplier, they are price makers.
They set the market price, constrained only by consumer demand.
Thus, Option (D) is true.
- Demand curve is flat: A flat, perfectly elastic demand curve is characteristic of perfect competition.
Here, individual firms are price takers.
A monopolist faces the market demand curve, which is downward-sloping.
To sell more units, the monopolist must lower the price.
Thus, the demand curve is downward-sloping, not flat.

Step 2: Final Answer:
The statement "Demand curve is flat" is not true for a monopoly market.