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प्रश्न
Explain any four features of monopolistic competition
उत्तर
According to Prof. Chamberlin, “Monopolistic competition refers to competition among a large number of sellers producing close but not perfect substitutes”. He coined the concept in his book “Theory of Monopolistic Competition” published in 1933. In a monopolistic competition, there are a large number of sellers who sell similar products (not perfect substitutes).
The following are the features of monopolistic competition:
1. Fairly Large Number Of Sellers: There are a fairly large number of sellers in a monopolistic competition. However, it is not as large as the number of sellers in perfect competition. Due to this reason, sellers’ behaviour is like monopoly.
2. Fairly Large Number of Buyers: There are a fairly large number of buyers in the monopolistic competition. Therefore, an individual buyer is not in a position to influence the market price by changing his demand.
3. Product Differentiation: Product differentiation is the main feature of monopolistic competition. It means each product in this market is different from other products in some way or the other. The difference could be in the form of brand name, trademarks, shape, quality, ingredients used, packaging, design, colour, smell, etc. The products are different but they are close substitutes to each other, i.e., cross elasticity of demand is very high.
E.g.: Lee jeans, Levis Jeans, Wrangler Jeans, etc. are all jeans but they have certain differences which distinguish one from the other. At the same time, jeans of different brands are close substitutes for each other.
4. Free Entry And Exit: Under monopolistic competition there is freedom of entry and exit. It means new firms are free to enter the market if there is profit. Similarly, they can leave the market, if they find it difficult to survive.
संबंधित प्रश्न
Choose the correct option:
Classification of markets on the basis of place
a) Local market, National market, International market
b) Very short period market, Local market, National market.
c) Short period market, National market, International market.
d) Local market, National market, Short period market.
Choose the correct option:
Under Perfect competition, sellers are
a) Price makers
b) Price takers
c) Price discriminators
d) None of these
Give economic term:
The point where demand and supply curve intersect.
Give economic term:
The cost incurred by the firm to promote sales.
Find the odd word out:
Market structure on the basis of competition: Monopoly, Oligopoly, Very Short Period market, Perfect competition.
Characteristics of long period market:
- All factors of production and costs are variable.
- Firms are able to adjust all costs.
- It is for a few years, generally up to five years.
- Supply of commodity cannot be increased.
Monopoly: Price discrimination:: ______ : Product differentiation
Type of market showing some but not all the features of a competitive market –
Number of firms producing differentiated products which are closely related –
Find the odd word
Market on the basis of place -
The interaction of demand and supply to determine price of a commodity in perfect competition is ______.
Product differentiation is the main feature of ______.
Assertion (A): Monopolist is a price maker.
Reasoning (R): Monopolist can fix the price of his own product as he controls the whole market supply.
Assertion (A): Product differentiation is the main feature of monopolistic competition.
Reasoning (R): Under monopolistic competition, all the products are perfect substitutes to each other
Identify & explain the concept from the given illustration.
Anoop Ayurveda produces unique herbal hair oil which has no close substitutes.
Identify & explain the concept from the given illustration.
Sunrise Cosmetic Company spends on advertisements, broadcasts on radio and television as well as distributes free samples of its shampoo product to in order to increase its demand.
Distinguish Between
Short period and Long period
Distinguish Between
Monopoly and Monopolistic competition
Explain any four features of perfect competition
Explain any four features of monopoly
State with reason whether you agree or disagree with the following statement:
There is product differentiation under monopolistic competition.
State with reason whether you agree or disagree with the following statement:
Selling cost is the only feature of monopolistic competition.
Study the following table, figure, passage and answer the question given below it.
| Price per unit in Rs. | Quantity demanded | Quantity supplied |
| 5 | 100 | 500 |
| 4 | ______ | 400 |
| 3 | 300 | ______ |
| 2 | ______ | 200 |
| 1 | 500 | ______ |
- Complete the table (2m)
- Derive the equilibrium price from the above table with the help of Suitable diagram. (2m)
- Mention the equilibrium point and equilibrium price in above diagram. (2m)
- Explain the concept of equilibrium price with the help of above diagram (2m)
The Spot market is classified on the basis of ______.
Which one of the market deals in the purchase and sale of shares and debentures?
What is mean by Regulated Market?
What is meant by Spot Market?
What is meant by Spot Market?
What is meant by Commodity Market?
How the market can be classified?
How the market can be classified on the basis of Economics?
Give economic terms:
The period in which all factors of production are variable.
Assertion and reasoning question:
- Assertion (A): With a rising price, the supply of a commodity falls.
- Reasoning(R): Seller earns more profit at a higher price.
Find the odd word out:
Classification of markets on the basis of time:
Homogeneous product is a feature of this market.
- Monopoly
- Monopolistic competition
- Perfect competition
- Oligopoly
Read the given passage and answer the questions:
|
In common language the term market means a specific place where buyers and sellers of a commodity meet and exchange their goods. But in Economics it is not necessarily a place but it is an arrangement through which buyers and sellers come in contact with each other directly or indirectly and exchange of goods takes place among them. Market can be classified on the basis of place, time and competition. Market on the basis of competition is perfect competition and imperfect competition. Perfect competition is an imaginary concept of market and in reality, we observe various types of imperfect competition like monopoly, duopoly, oligopoly and monopolistic competition. In practice monopolistic competition is used. In this market there are some features of perfect competition and monopoly acting together. The uniqueness of this market lies in the fact that a difference is made between cost of production and selling cost. Selling cost refers to the cost incurred by the firm to create more demand for its product and increase the volume of sale. It includes expenditure on advertisement, hoardings, window display etc. |
Questions:
- Explain the concept of Market from Economic sense.
- Write the classification of Market.
- Write your own opinion about selling cost.
