A monopolist faces a down ward or negative sloping demand curve. Because the monopolist is a sole supplier in the industry, the firm's demand curve is also the industry's demand curve.

The demand curve is downward sloping and fairly elastic implying that the monopolist/producer can either determine the price at which he sells or the quantity that he puts on the market but not both. If he (monopolist) fixed a high price, quantity demanded will be low and vice versa. Similarly if he supplies much of the commodity, price will be low and vice-versa.

A monopolist is seen to be a price maker since he can influence the prices in the market by changing the quantity produced and supplied in the market.

Figure 2.31 Demand curve for a Monopolist.

The demand curve for a monopolist is also his average revenue curve ( DD=AR) as seen in the above figure.