Figure13-4Comparing the Demand Curves of a Perfectly Competitive Producer and a Monopolist Because an individual perfectly competitive producer cannot affect the market price of a good, it faces the horizontal demand curve DC, as shown in panel (a), allowing it to sell as much as it wants at the market price. A monopolist, though, can affect the price. Because it is the sole supplier in the industry, it faces the market demand curve DM, as shown in panel (b). To sell more output, it must lower the price; by reducing output, it raises the price.