Access for free at openstax.org
9.2 • How a Profit-Maximizing Monopoly Chooses Output and Price 223

require consumers to purchase its product. Because the monopolist is the only firm in the market, its demand

curve is the same as the market demand curve, which is, unlike that for a perfectly competitive firm,

downward-sloping.

Figure 9.3 illustrates this situation. The monopolist can either choose a point like R with a low price (Pl) and

high quantity (Qh), or a point like S with a high price (Ph) and a low quantity (Ql), or some intermediate point.

Setting the price too high will result in a low quantity sold, and will not bring in much revenue. Conversely,

setting the price too low may result in a high quantity sold, but because of the low price, it will not bring in

much revenue either. The challenge for the monopolist is to strike a profit-maximizing balance between the
{"source": "downloads\\business\\economics\\Microeconomics3e.pdf", "file_hash": "830b81f41611ac67a490444dbb5d6aed292224606965b06965b914443c93331a", "creator": "PDFMiner", "batch_upload": true, "creationdate": "2022-12-07T14:15:44-06:00", "file_size_mb": 26.99, "moddate": "2022-12-07T14:23:05-06:00", "title": "Principles of Microeconomics 3e", "file_type": ".pdf", "source_file": "downloads\\business\\economics\\Microeconomics3e.pdf", "file_name": "Microeconomics3e.pdf", "producer": "Prince 14.2 (www.princexml.com)", "uploaded_via": "batch_uploader", "total_pages": 597, "upload_timestamp": "2026-02-07T15:24:38.309401"}