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Question
Which of the characteristics separates it from perfect competition and why?
Solution
Product differentiation in monopolistic competition separates it from perfect competition because the products are homogeneous. They are identical in all respects such as size, shape and quality in perfect competition. Selling cost is heavy in the case of monopolistic completion whereas the selling is not incurred as they have perfect knowledge of product in perfect competition.
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RELATED QUESTIONS
Explain the features of monopoly.
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
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
A seller cannot influence the market price under (choose the correct alternative)
a) Perfect competition
b) Monopoly
c) Monopolistic competition
d) All of the above
State whether the following statement is true or false.
There is no product differentiation under monopolistic 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.
Answer the following question
What are the features of Perfect Competition?
Answer the following question
What are the features of monopolistic competition?
State with reason whether you agree or disagree with the following statement
A seller is price maker in monopoly.
Answer in detail
What is Perfect Competition? Explain price determination under Perfect Competition.
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:
Sellers and the buyers are price takers in perfect competition.
Answer the following question.
What is the reason for an indeterminate demand curve under Oligopoly?
Distinguish between perfect competition and monopolistic competition on the basis of the following:
(a) Number of sellers
(b) Nature of product
(c) Selling cost
PASSAGE
In India, markets for automobiles, cement, steel, aluminium, etc, are the examples of oligopolistic market. In all these markets, there are few firms for each particular product. Duopoly is a special case of oligopoly, in which there are exactly two sellers. Under duopoly, it is assumed that the product sold by the two firms is homogeneous and there is no substitute for it. Examples where two companies control a large proportion of a market are: (i) Pepsi and Coca-Cola in the soft drink market; (ii) Airbus and Boeing in the commercial large jet aircraft market.
Operating systems for smart phones and computers provide excellent examples of oligopolies in big tech. Apple iOS and Google Android dominate smart phone operating systems. Computer operating systems are overshadowed by Apple and Microsoft Windows.
- Give examples of oligopolistic market in India (1 mark)
- Explain the concept of duopoly with a suitable example from the passage (1 mark)
- Express your personal opinion based on the above information (2 marks)
