Because the firm is the only producer of its brand,it faces a downward-sloping demand curve: Price exceeds marginal cost and the firm has monopoly power. In the short run described in part (a),price also exceeds average cost,and the firm earns profits shown by the shaded rectangle.Because the firm is the only producer of its brand, it faces a downward-sloping demand curve: Price exceeds marginal cost and the firm has monopoly power. In the short run described in part (a), price also exceeds average cost, and the firm earns profits shown by the shaded rectangle