Comparing the Demand Curves of a Perfectly Competitive Producer and a MonopolistBecause an individual perfectly competitive producer cannot affect the market price of the good, it faces a horizontal demand curve DC, as shown in panel (a). A monopolist, on the other hand, can affect the price. Because it is the sole supplier in the industry, its demand curve is 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.