Question: Define a price maker and explain why the demand curve of a monopoly is more inelastic than the demand curve of a monopolistic competitive firm.

  1. Define a price maker and explain why the demand curve of a monopoly is more inelastic than the demand curve of a monopolistic competitive firm.
  2. Define normal profit and explain why making normal profit is a requirement for any firm who wishes to remain in business in the long run.
  3. Why is a perfectly competitive market structure very unlikely to exist in the real world?
  4. Why does the share market closely reflects a perfectly competitive market?

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