question_answer

Write any four points of difference between price making firm and price taking firm.

Answer:

 Difference between price making firm (monopoly) and price taking firm (perfect competition) are:    

Basis	Monopoly	Perfect Competition
Meaning	It refers to the market where there is a single seller or producer selling a particular good in the market.	It refers to the market where there are large number of sellers, selling homogeneous goods.
Degree of elasticity	Firm?s demand curve under monopoly is relatively less elastic.	Firm?s demand curve under perfect competition is perfectly elastic.
Slope of demand curve	Demand curve slopes downward with low elasticity and its steeper.	Demand curve is a horizontal straight line parallel to the X-axis.
Diagrammatic presentation	Demand curve for monopoly firm Quantity (units)	Demand curve for perfectly competitive firm. Quantity (units)