The main points of distinction or difference between market price and normal price are as follows:
(1) Market price is the price which prevails in the market at any particular moment due to the temporary equilibrium of the forces of demand and supply. The normal price on the other hand, is the price which tends to prevail in the market in the long run. It is the result of long run equilibrium between demand and supply.
(2) Market price is the result of temporary causes and passing events which influences demand and supply or both; whereas normal price is affected by persistent and permanent causes in the long run. The market price oscillates round the normal price.
(3) Market price is the actual price which prevails in the market at any particular moment but this is not the case with the normal price. The normal price in actual practice seldom prevails in the market, because in the long run a change takes place either in demand or in supply conditions. In fact, the long run normal price like tomorrow, never comes.
(4) In the very short period, the cost of production has no effect on market price but in the long run, the normal price must be equal to both the marginal cost and the minimum average cost.
(5) All kinds of commodities have a market price but the normal price will be of those commodities which are reproducible. For instance, unique, diamonds or some old manuscript cannot be reproduced even if their demand rises. The supply will remain fixed. So we cannot measure their normal price.