CA Foundation · Business Economics · Price Determination in Different Markets
Which combination correctly pairs the market structure with its number of sellers and nature of product?
Monopolistic competition has many sellers selling differentiated products that are close substitutes. The other pairings are wrong: oligopoly has few sellers, perfect competition has many sellers of a homogeneous product, and monopoly has a single seller with no close substitutes.
- AMonopolistic competition: many sellers, differentiated productCorrect
- BOligopoly: single seller, homogeneous product
- CPerfect competition: few sellers, differentiated product
- DMonopoly: many sellers, close substitutes available
Explanation
Monopolistic competition has many sellers offering differentiated but close substitute products. Oligopoly has few sellers, perfect competition has very many sellers with a homogeneous product, and monopoly has one seller with no close substitutes. Hence only option A is correct.
Did you get it right without looking?
One question tells you little. A timed set on Price Determination in Different Markets shows your real accuracy, how long you take and where you lose marks.
More Price Determination in Different Markets questions
- A monopolist sells in two separate markets with demand P1 = 100 - 2Q1 and P2 = 60 - Q2. Marginal cost is constant at ₹20. Under third-degree…
- A monopolist has the demand function P = 60 - Q and total cost TC = 100 + 10Q. What is its maximum profit?
- A smartphone brand operates in a market with many competing brands offering similar but differentiated features. Each brand has some control…
- When a market is classified on the basis of area, which of the following is an example of a local market rather than a national or internati…
- A firm's unit cost of production is ₹240 and it follows a full-cost pricing rule with a mark-up of 25% on cost. If the firm instead wanted t…
- Under monopolistic competition, firms spend heavily on advertising and branding mainly because they want to: