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प्रश्न
Answer in detail
What is Perfect Competition? Explain price determination under Perfect Competition.
उत्तर
Perfect competition is defined as a market structure that consists of a large number of buyers and sellers such that no individual seller can influence the existing market price of the product. All the sellers in a perfect competition market produce homogenous products; that is, the output of all sellers is similar to each other and each firm sells its output at a uniform price.
Price Determination under Perfect Competition
Under perfect competition, the market price, or the equilibrium price, is determined in the industry. Individual firms have no influence on this price. In the industry, the price is determined by the intersection of the market supply and market demand curves. In other words, the price under perfect competition is set at the point where the market supply of the good is equal to the market demand for the good. The individual firms take the market price so determined as fixed and adjust their supply accordingly.
In the figure, part A depicts the infinitely elastic demand curve faced by an individual firm in a perfect competition market. Part B depicts how the market demand and market supply curves interact to determine the market price. The market price OP is determined by the intersection of market (industry) demand curve DD and market (industry) supply curve SS. The market equilibrium is at point E, where OQx (amount of output) is supplied at the equilibrium market price OP. The price for the commodity is given to an individual firm and no single firm can influence the market price. The firm faces an infinitely elastic demand curve, which suggests that no matter how many units of output are supplied, the price will remain the same. Hence, we can conclude that under a perfect competition market, an individual firm is a price taker and not a price maker.
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संबंधित प्रश्न
State whether the following statement is True or False
Product differentiation is the most distinguishing feature of monopolistic competition.
Features of Monopolistic Competition.
What are the features of perfect competition.
The objective of a seller in monopoly market is...............................
(loss \ profit \ negative profit \ zero profit)
Explain the features of monopoly.
Homogenous product’ is a characteristic of : (choose the correct alternative)
(a) Perfect competition only
(b) Perfect oligopoly only
(c) Both (a) and (b)
(d) None of the above
Explain the implications of the following in a perfectly competitive market:
Large number of buyers
Explain the implications of the following in an oligopoly market:
Inter- dependence between firms
Giving reason, state whether the following statement is true or false.
A Monopolist can sell any quantity he likes at a price.
Differentiated products is a characteristic of: (Choose the correct alternative):
(a) Monopolistic competition only
(b) Oligopoly only
(c) Both monopolistic competition and oligopoly
(d) Monopoly
Explain the implications of the following in a perfectly competitive market :
Large number of sellers
Explain the implications of the following in a perfectly competitive market :
Homogeneous products.
Explain the implications of the following in an oligopoly market: Barriers to entry of new firms
Explain the implications of the following in an oligopoly market: A few or a few big sellers
‘A few big sellers’ is a characteristics of : (choose the correct alternative)
a. Perfect competition
b. Monopolistic competition
c. Oligopoly
d. None of the above
Explain the implications of the following : Product differentiation in monopolistic competition.
What is price-maker firm?
Which of the characteristics separates it from perfect competition and why?
Explain the implications of the following in a perfectly competitive market:
Freedom of entry and exit to firms
Average revenue and Price are always equal under:(choose the correct alternative)
(a) Perfect competition only
b) Monopolistic competition only
(c) Monopoly only
(d) All market forms
Explain the 'free entry and exit of firms' feature of monopolistic competition.
What is meant by collusive oligopoly?
Price discrimination is possible under monopoly.
In monopolistic completion, goods have no close substitutes.
Explain the significance of the feature 'product differentiation' in monopolistic competition.
What can you say about the number of buyers and sellers under monopolistic competition?
Answer the following question :
What are the features of monopolistic competition ?
Give reason or explain the following.
Price discrimination is possbile under monopoly.
Fill in the blank with proper alternatives given in the bracket:
Under monopoly there is existence of ______________ .
State whether the following statement is true or false.
There is no product differentiation under monopolistic competition.
Define or Explain :
Average revenue.
State whether the following statement is True or False with reason:
Perfect competition means pure competition.
Distinguish between :
Output method and Expenditure method.
State with reasons, whether you Agree or Disagree with the following statements.
Perfect competition is an imaginary concept.
Give reasons or explain the following statements
There is single price in perfect competition.
Answer the following question
What are the features of Perfect Competition?
Answer the following question
What are the features of monopoly?
Answer the following question
What are the features of monopolistic competition?
State with reason whether you agree or disagree with the following statement
Perfect Competition means Monopolistic Competition.
Answer in detail
What is monopoly? Explain in detail the features of monopoly?
Distinguish between the following:
Perfect competition and Pure competition
Distinguish between the following:
Perfect competition and Monopoly
Distinguish between the following:
Natural monopoly and legal monopoly
Distinguish between the following:
Perfect competition and Monopolistic competition
Define or explain the following concept:
Monopolistic Competition
Give reason or explain:
Single price prevails in perfect competition.
Give reason or explain:
Price discrimination is possible under monopoly.
Give reason or explain:
Sellers and the buyers are price takers in perfect competition.
State whether the following statement is TRUE and FALSE.
In a monopoly market, firm and industry are the same.
State whether the following statement is TRUE and FALSE.
Product differentiation is not possible under perfect competition.
Match the following:
|
Group A
|
Group B
|
|
Monopoly
|
Public monopoly
|
|
Product differentiation
|
Abnormal profit
|
|
Railway
|
Monopolistic Competition
|
|
Perfect Competition
|
Prof. Chamberlin
|
|
Pure Competition
|
Homogenous product
|
|
|
Cartel
|
|
|
Selling cost
|
Fill in the blank with appropriate alternative given below
Under perfect competition commodities are ________________ in nature.
Fill in the blank with appropriate alternative given below
_____________ appears in a monopoly market.
Fill in the blank with appropriate alternative given below
In ________ market, seller creates products differentiation.
Fill in the blank with appropriate alternative given below
Monopolist means __________ competitive.
Define 'or' explain the following concept.
Product Differentiation:
Answer the following question.
What is the reason for an indeterminate demand curve under Oligopoly?
Answer the following question.
Elaborate three main features of a monopoly form of market.
Distinguish between perfect competition and monopolistic competition on the basis of the following:
(a) Number of sellers
(b) Nature of product
(c) Selling cost
In an economic sense, the market includes the following activities
- The place where goods are sold and purchased.
- An arrangement through which buyers and sellers come in close contact with each other directly or indirectly.
- A shop where goods are sold.
- All of the above.
Observe the table and answer the question:
| Price of banana (per dozen) in ₹ | Demand (in dozen) | Supply (in dozen) | Relation between DD and SS |
| 10 | 500 | 100 | DD > SS |
| 20 | 400 | _____ | DD > SS |
| 30 | _____ | 300 | DD = SS |
| 40 | 200 | _____ | DD < SS |
| 50 | ______ | 500 | DD < SS |
Fill in the blanks in the above schedule.
Features of oligopoly market:
- There are few firms or sellers.
- Sellers sell differentiated product.
- There is free entry and exit of firms.
- There is considerable element of uncertainty in this type of market.
Find the odd word
Selling cost -
