Final answer:
In a monopoly, demand is downward-sloping and price (P) is greater than marginal revenue (MR). Monopolists can set their own price levels, which changes with the quantity they decide to produce.
Step-by-step explanation:
In monopoly markets, demand is downward-sloping, demonstrating that a monopolist has the power to set its own prices to a certain degree. This is in contrast to a perfectly competitive market, where the firm faces a perfectly elastic, or flat, demand curve. In a monopolistic scenario, if a monopolist chooses to sell a higher quantity (Qh), the price will be lower (Pl), whereas a lower quantity (Ql) can be sold at a higher price (Ph).
This relationship means that, for a monopolist, price (P) is greater than marginal revenue (MR). When additional firms enter the market as in monopolistic competition, the original firm's perceived demand curve, as well as its associated marginal revenue curve, shifts to the left, leading to a new optimal price and output level.