QUESTION 3

1. Explain with the support of graph(s) the demand, marginal revenue, average revenue and total revenue curves of a monopolistic firm.2 Marks

1. Graph and explain the difference in the demand curve of a monopoly and a monopolistic firm.1.5 Marks
2. Graph and explain the concept of normal profit. In your answer, explain why normal profit is a key requirement for firms wanting to remain in business in the long run?1.5 Marks

1. Why is a perfectly competitive market structure very unlikely to exist in the real world?1 Mark

1. Which market share most of the characteristics of a perfectly competitive market? Explain.1 Mark