In the space provided in the graph above,draw a perfectly elastic demand curve D1,and a very elastic demand curve,D2.
Definitions:
Pure Monopoly
A market structure where a single seller controls the entire supply of a product or service, and no close substitutes exist.
Long-run Equilibrium
A state in which all resources are optimally allocated, and all firms in the industry are making normal profits, with no external pressures for change.
X-inefficiency
The inefficiency that occurs in a firm due to a lack of competitive pressure, leading to higher costs than necessary.
Pure Competition
A market structure characterized by a large number of small firms, homogenous products, and free entry and exit, leading to price-taking behavior.
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