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Question
State with reason whether you agree or disagree with the following statement:
Seller is the price maker under perfect competition.
Solution
I disagree with the given statement.
Reason:
- In a perfectly competitive market, there are large number of sellers.
- Each seller forms a negligible part of the entire market.
- No single seller is in a position to influence the market price.
- Sellers are said to be ‘price takers’ under perfect competition.
- In contrast, in monopoly market, there is only one seller who controls the entire market supply for a product which has no close substitute. Therefore, the seller is a ‘price maker’ in monopoly.
RELATED QUESTIONS
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.
Give economic term:
The point where demand and supply curve intersect.
Give economic term:
The cost incurred by the firm to promote sales.
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
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 ______.
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
Explain any four features of monopolistic competition
State with reason whether you agree or disagree with the following statement:
There is product differentiation under monopolistic competition.
- Mention the equilibrium point and equilibrium price in above diagram. (2m)
- Explain the concept of equilibrium price with the help of above diagram (2m)
PASSAGE
Amul is the first choice of so many ice cream lovers in India among the top ice cream brand category. Amul brand, owned by Gujarat Co-operative Milk Marketing Federation, was established in 1946 in Anand, Gujarat.
The second on the list of top ice cream brands in India is Vadilal.
Cornetto and Magnum are one of the top ice cream brands in India owned by Hindustan Unilever. Mother Dairy is a very strong name in the Indian ice cream industry. This company is very similar to Amul, in terms of the products, they manufacture and sell. Another big player in the ice cream industry is Havmor. Havmor Company has been able to stand strong as one of the big fighters in the battle of top ice cream brands in India for very long. Ice cream market also has local and less popular brands apart from the top brands.
Amul was (and still is) in the Guinness record for running the longest- ever advertising campaign. The advertising strategy of Amul through digital marketing made the most of it through platforms such as Facebook, Twitter, Instagram, and others.
- Identify the most important feature of the ice cream market (1 marks)
- Identify the type of cost incurred by firms on advertising campaigns and strategies. (1 marks)
- Express your personal opinion about the ice cream market based on the above information (2 marks)
Explain the concept of perfect competition and price determination under perfect competition
What are the features of a market?
The Spot market is classified on the basis of ______.
What is mean by Regulated Market?
What is meant by Spot Market?
What is meant by Spot Market?
What is meant by Commodity Market?
Explain the types of the market on the basis of time.
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:
Give an economic term:
Period in which supply is fixed and so the price is determined by demand only.
