1)Use examples to illustrate each of these concepts: (A) Market Prices (B) Market Disequilibrium (C) Demand 2)Which of the following is (are) true of monopoly? (i) A monopoly has the ability to set its price

1)(A) Market price

market price is basically the price determined by the market forces, it is diffrent from theoretical price and agreed price for example the price of facebook on stock exchange the market, it is not the same as the theoretical price calculated on no arbitrage principle.

(B)

Market disequilibrium is a state of market where the market demand and supply don't match, this happens because market price and equilibrium price don't match. For example 100 units are demanded at $5 but 250 units are quantity supplied. Now suppose the quantity demanded will be 250 at a price of $2 now the demand and supply gets equal at $2 hence equilibrium price is $2 and since market demand is operating at a price of $5, hence market is at disequilibrium.

(C)

Demand is basically a market force, which shows how much quantity of s commodity people are willing to buy. For example if person A is willing to buy 10 pen, while B wants to buy 20 pen and assuming there are two buyers in the market hence the demand of pen is 30.

2)The correct option is:

a. (i) only

Since the monopolist is the only seller in the market, the entire market is dependent on its supply. The monopolist firm enjoys the complete control of the market and hence has the power to set it's own prices.