Question:
Explain the feature of few firms in an oligopoly market.
Answer:
- The number of sellers in an oligopoly market is small—when there are two or more than two, but not many sellers.
- What matters is that these few sellers account for most of the industry's sales.
- These "few"sellers consciously dominate the industry and indulge in intense competition. Each firm is aware of that it possesses a large degree of monopoly power.
- For example, the market for mobile service provider in India is an oligopolist structure as there are only few producers of mobile service provider. There exists severe competition among different firms and each firm tries to manipulate both prices and volume of production to outsmart each other.
Non-Competitive Markets
Q 1.
What is the importance of monopoly?
Q 2.
Which features of monopolistic competition are competitive in nature?
Q 3.
Under oligopoly, there are large number of buyers and sellers.
Q 4.
What is the value of MR when the demand curve is elastic?
Q 5.
Explain the main features of barriers to the entry of firms.
Q 6.
What is a price-maker firm?
Q 7.
Demand curve facing a monopoly firm is a constraint for the monopolist."Comment.
Q 8.
Why AR curve (demand curve) under monopolistic competition is more elastic than AR curve under monopoly?
Q 9.
Price discrimination should be socially desirable. How?
Q 10.
What is the reason for the long run equilibrium of a firm in monopolistic competition to be associated with zero profit?
Q 11.
Why is the demand curve under monopoly less elastic as compared to the demand curve under monopolistic competition?
Q 12.
Under monopolistic competition there is only one seller of the product.
Q 13.
Define product differentiation.
Q 14.
Give reasons for the following statements:
- Demand curve facing a perfectly competitive firm is a horizontal straight line.
- Demand curve facing a monopolistic competitive firm is a downward sloping curve.
- Demand curve facing a monopoly firm is less elastic than that curve facing a monopolistic competitive firm.
Q 15.
Under monopoly a firm sells the goods at a single price.
Q 16.
List the three different ways in which oligopoly firms may behave.
Q 17.
Giving reasons, state whether the following statements are true or false.
Under monopoly all firms can sell at any price.
Q 18.
Which features of monopolistic competition are monopolistic in nature?
Q 19.
Under which market form, firm is a price-maker?
Q 20.
Compare between perfect competition and monopoly.
Q 21.
Under monopoly new firms can enter the industry to raise the supply.
Q 22.
In which form of market there is product differentiation?
Q 23.
In spite of having monopoly why the Indian Railways has not increased the fare for many years?
Q 24.
In monopoly, firm is different from industry.
Q 25.
Explain the feature of few firms in an oligopoly market.
Q 26.
Under oligopoly though firms are free to take decisions about price and quantity to be sold but they do not change the price and hence buyers are deprived of the benefit of fall in price. Comment.
Q 27.
How many firms are there in a monopoly market?
Q 28.
What are the shapes of AR and MR curves under monopoly?
Q 29.
What does Monopolistic Competition mean?
Q 30.
Under monopolistic competition, all the customers have perfect knowledge of the market conditions.
Q 31.
How to reduce the incidence of selling cost under monopolistic competition because of which price tends to be higher than what it would have been if production cost would have been the sole basis?
Q 32.
Give reasons for the following statements:
- A perfectly competitive firm is a price-taker.
- Product differentiation is a characteristic feature of a monopolistic competitive market,
- A monopolist cannot fix both the quantity that he likes to produce and the price at which he would like to sell.
Q 33.
Give the meaning of Oligopoly'.
Q 34.
Although there are few (more than one) firms in oligopoly. Even these firms can enjoy monopoly power. How?
Q 35.
Because of product differentiation under monopolistic competition, price tends to be higher than what it ought to have been in real terms and hence consumers suffer. How?
Q 36.
How the efficiency may increase if two firms merge?
Q 37.
What is meant by prices being rigid? How can oligopoly behaviour lead to such an outcome?
Q 38.
Under monopolistic competition price discrimination can be made easily.
Q 39.
"A day without selling costs is nearly impossible". Comment.
Q 40.
Under monopolistic competition, a firm faces a perfectly elastic demand curve.
Q 42.
Explain the implication of the following: The feature of no close substitutes' under monopoly.
Q 43.
Selling cost is a nail in the coffin of consumer's sovereignty. How?
Q 44.
If the firm in the toothpaste industry have the following market shares, which market structure would best describe the industiy? [1 Mark]
Q 45.
What do you mean by duopoly?
Q 46.
Average revenue will always be equal to marginal revenue in all market conditions. Defend or refute.
Q 47.
Draw a demand curve in different market situation and also compare its elasticity of demand.
Q 48.
Explain why the demand curve facing a firm under monopolistic competition is negatively sloped?
Q 49.
Explain any two sources of restricted entry under monopoly.
Q 50.
A monopolist can sell any quantity he likes at a price. Give reasons with true or false.
