Advertisements
Advertisements
प्रश्न
Answer the following question.
Is a firm under perfect competition a price taker, or a price maker? Justify your answer.
उत्तर
A firm under the perfect competition is a price taker. There exist a large number of buyers and sellers in a perfect competitive market. The number of sellers is so large that no individual firm owns the control over the market price of the commodity. Due to the existence of a large number of sellers in the market, there exists a perfect and free competition in the market. The firm acts as a price taker, while the price is determined by the‘invisible hands of the market’, i.e. by demand for and supply of the commodities. If an individual firm raises its price, then it will lose all its buyers to other firms and vice-versa. Thus, firms have no role to play other than supplying the required output at the existing market price, and therefore a firm is a price taker and not a price maker.
APPEARS IN
संबंधित प्रश्न
Explain ‘large number of buyers and sellers' features of a perfectly competitive market.
Explain Perfect knowledge about the markets feature of perfect competition.
There are no barriers in the way of firms leaving or joining industry in a perfectly competitive market. Explain the significance of this feature.
Under which market form is a firm a price taker?
Explain the implication of ‘freedom of entry and exit to the firms’ under perfect competition.
In which market form can a firm not influence the price of the product?
Explain how price is determined in a perfectly competitive market with fixed number of firms.
What are the characteristics of a perfectly competitive market?
How is the optimal amount of labour determined in a perfectly competitive market?
Show with the help of a diagram, how a perfectly competitive firm earns a normal profit in short-run equilibrium.
Choose the correct answer from given options
A firm is not a price maker under
Explain the short-run equilibrium of a firm facing losses under Perfect Competition.
How is Total Revenue under perfect competition different from Total Revenue under imperfect competition? Give two points to show the difference.
A perfectly competitive firm always enjoys normal profit in the long run, irrespective of the situation it faces in the short run. Discuss the statement in brief.
A car company ‘W’ hired an international cricket player for its endorsement in India, while two other car companies’ ‘Y’ and ‘R’ hired two famous Bollywood film stars for this purpose. Explain the features of the competitive market indicated above.
