Advertisements
Advertisements
Question
Which of the following statements are true?
- Monopolistically competitive markets have high selling costs.
- Monopolistically competitive markets sell homogeneous goods.
- Any firm can start a business in a monopolistically competitive market.
Options
only (i)
Only (i) and (ii)
Only (i) and (iii)
All of these
Advertisements
Solution
Only (i) and (iii)
Explanation:
- Statement (i): Goods are substantially distinctive (by branding, quality, or design); enterprises must spend heavily on advertising and promotions (selling expenses) to draw consumers away from rivals.
- Statement (iii): There is freedom of entry and exit in this market system, meaning any new firm can start a business without experiencing severe economic or legal barriers.
APPEARS IN
RELATED QUESTIONS
A seller cannot influence the market price under:
"The price of a product under perfect competition is determined by an individual seller."
Observe the relationship of the first pair of words and complete the second pair.
Single seller in the market : Monopoly
Single buyer in the market : ______
Products sold by each firm in a perfectly competitive market are perfect substitutes of each other.
What is meant by pure competition?
Identify the market form of the following:
The Government of India is the sole buyer of fighter aircrafts.
State the market form of the following commodity.
Railways
Which type of market structure is the following? Give reason.
Lipstick
Which type of market structure is the following? Give reason.
Soft drinks
Why can a monopolist charge different prices in different markets?
