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Question
Write short answer for the following question :
Features of Pure Competition.
Solution
Pure competition is a part and parcel of perfect competition. According to Chamberlin, "a market becomes pure when monopoly is kept away."
Pure competition has certain conditions of perfect competition. They are
1) Large number of sellers
2) Large number of buyers
3) Free entry and exist
4) Homogeneous product
5) Single Price
1) Large number of sellers/sellers are price takers
There are many potential sellers selling their commodity in the market. Their number is so large that a single seller cannot influence the market price because each seller sells a small fraction of total market supply. The price of the product is determined on the basis of market demand and market supply of the commodity which is accepted by the firms, thus seller is a price taker and not a price maker.
2) Large number of buyers:
There are many buyers in the market. A single buyer cannot influence the price of the commodity because individual demand is a small fraction of total market demand.
3) Free entry and exit:
New firms can enter and exit the market without any restrictions.
4) Homogeneous product:
Firms produce and sell identical units of a given product, in purely
competitive market, i.e., units of a commodity produced by each of them is uniform, in respect of size, shape, colour, quality, etc. Thus commodities have perfect substitute for each other.
5) Single price:
In Pure Competition all units of a commodity have uniform or a single price. It is determined by the forces of demand arid supply.
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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. |
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- Explain the meaning of trademark in your own words.
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