Question

Assertion (A): GDP does not exhibit the structure of the product.

Reason (R): If the increase in GDP is mainly due to increased production of war equipment and ammunitions, then such an increase cannot improve welfare in the economy.

Options

• Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A)

• Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)

• Assertion (A) is true, but Reason (R) is false

• Assertion (A) is false, but Reason (R) is true

Answer 1

Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).

Explanation:

Monopolistic markets have certain characteristics.

1. Product with a lot of uniqueness
2. Low entry and exit barriers for a large number of buyers and sellers
3. Non-competitive pricing