CMA Foundation · Fundamentals of Business Economics and Management · Forms of Market
A trader in Surat sells cloth to buyers in Kolkata, Chennai and Delhi entirely through phone calls and an online portal, and the price quoted is the same for all. Which feature of a market does this best illustrate?
The case shows that a market is not tied to a particular locality. Buyers and sellers can deal through phone or online contact and still trade at one price, so what matters is their contact and the common price, not a physical meeting place.
- AA market needs a fixed physical location
- BA market requires direct physical meeting of buyers and sellers
- CA market is not limited to a locality; contact between buyers and sellers is what mattersCorrect
- DA market always has a single seller
Explanation
Trade happens without physical presence or a fixed place, so the economic concept of market depends on contact and price formation, not geography. Options A and B contradict the case. Option D is unrelated, as the case does not suggest a single seller.
Did you get it right without looking?
One question tells you little. A timed set on Forms of Market shows your real accuracy, how long you take and where you lose marks.
More Forms of Market questions
- A monopolist faces the demand curve P = 100 - 2Q. At what output is total revenue maximised?
- In the price leadership model of oligopoly, which statement is correct?
- A railway offers cheaper fares to students and senior citizens than to other adult passengers for the same journey. This is an example of:
- The kinked demand curve model explains why prices in an oligopoly tend to be rigid. Which assumption about rivals' behaviour underlies the k…
- Three large Indian cement producers privately agree to fix a common selling price and share the market. In economic terms this arrangement i…
- A monopolist has MC = Rs 20 per unit (constant). In market A, price elasticity of demand is 2 and in market B it is 4. Using MR = P(1 - 1/e)…