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प्रश्न
Write short notes on Price determination under perfect competition.
उत्तर
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 the 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
Resource allocation
Meaning and Definition of Market?
Define or explain the following concepts:
Pure competition
Explain any two features of monopoly market.
Write short answer for the following question :
Features of Pure Competition.
State whether the following statements are ‘True’ or ‘False’.
There is no need of advertisement in monopolistic competition.
Distinguish between Any FOUR of the following :
Natural monopoly and Legal monopoly.
State whether the following statements are True or False with reasons:
There are advertisements of commodities in perfect competition.
State Whether the following statements are TRUE or FALSE:
There is no price discrimination in the monopolistic competition.
Define or explain the following concept:
Market
Answer the following question.
Discuss briefly the meaning of "Price discrimination" and "Product differentiation" with the help of suitable examples.
Explain the concept of market.
Study the following passage and answer the questions:
| A trademark is a recognisable phrase, word, or symbol that denotes a specific product and legally differentiates it from all other products of its kind. Registering a trademark prevents others from using it so that consumers are not confused about the product. Trademarks add value and recognition to a company. Therefore, a company with well-established trademarks and brands in its portfolio enjoy a good reputation in the market. It also makes it easy to raise money from the stock market or borrow from lenders. |
Questions:
- Explain the meaning of trademark in your own words.
- What benefits does the seller/company enjoy by registering its trademark?
