CA Foundation · Business Economics · Price Determination in Different Markets
Which of the following markets is best classified as oligopoly with differentiated products?
Passenger car manufacturers in India form an oligopoly with differentiated products, because a few large firms dominate and each sells distinct brands, so their pricing decisions are interdependent. Vegetable vendors, a sole distributor and many tailors fit other market forms.
- ALocal vegetable vendors selling identical tomatoes
- BPassenger car manufacturers in India, a few large firms selling distinct brandsCorrect
- CThe sole electricity distribution company in a city
- DThousands of small tailoring shops with varied designs
Explanation
Oligopoly means a few large sellers whose decisions are interdependent. Car makers in India are few and sell differentiated brands. Tomato vendors approximate perfect competition, the sole electricity distributor is a monopoly, and tailoring shops show monopolistic competition.
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 perfectly competitive firm has total cost TC = 500 + 4Q + Q² (in rupees). The market price is ₹24 per unit. What output maximises its prof…
- For a single-price monopolist facing a downward-sloping straight-line demand curve, which of the following statements about marginal revenue…
- Which of the following market structures is characterised by a single seller, no close substitutes and significant barriers to entry, so tha…
- 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…