Economics Perfect Competition Questions
The demand curve faced by a monopolistic firm is downward sloping. This means that as the price of the monopolistic firm's product decreases, the quantity demanded by consumers increases, and vice versa. Unlike in perfect competition, a monopolistic firm has the ability to influence the price of its product by adjusting the quantity it produces and sells. As a result, the monopolistic firm faces a downward sloping demand curve, which reflects the inverse relationship between price and quantity demanded.