Question:
Why AR curve (demand curve) under monopolistic competition is more elastic than AR curve under monopoly?
Answer:
- AR curve under both the markets slope downwards.
- However, AR curve under monopolistic competition is more elastic as compared to AR curve under monopoly because of presence of close substitutes.
- AR curve is less elastic in monopoly because of no close substitutes.
Non-Competitive Markets
Q 1.
What is the importance of monopoly?
Q 2.
What is a price-maker firm?
Q 3.
Which features of monopolistic competition are competitive in nature?
Q 4.
Under monopoly a firm sells the goods at a single price.
Q 5.
Under which market form, firm is a price-maker?
Q 6.
How many firms are there in a monopoly market?
Q 7.
Why AR curve (demand curve) under monopolistic competition is more elastic than AR curve under monopoly?
Q 8.
Under monopolistic competition there is only one seller of the product.
Q 9.
Under oligopoly, there are large number of buyers and sellers.
Q 10.
Which features of monopolistic competition are monopolistic in nature?
Q 11.
Why is the demand curve under monopoly less elastic as compared to the demand curve under monopolistic competition?
Q 12.
What is the value of MR when the demand curve is elastic?
Q 13.
Demand curve facing a monopoly firm is a constraint for the monopolist."Comment.
Q 14.
What are the shapes of AR and MR curves under monopoly?
Q 15.
Explain the main features of barriers to the entry of firms.
Q 16.
Define product differentiation.
Q 17.
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 18.
List the three different ways in which oligopoly firms may behave.
Q 19.
What is the reason for the long run equilibrium of a firm in monopolistic competition to be associated with zero profit?
Q 20.
Giving reasons, state whether the following statements are true or false.
Under monopoly all firms can sell at any price.
Q 21.
What does Monopolistic Competition mean?
Q 22.
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 23.
Under monopoly new firms can enter the industry to raise the supply.
Q 24.
Price discrimination should be socially desirable. How?
Q 25.
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 26.
In monopoly, firm is different from industry.
Q 27.
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 28.
Explain the implication of the following: The feature of no close substitutes' under monopoly.
Q 29.
How the efficiency may increase if two firms merge?
Q 30.
In spite of having monopoly why the Indian Railways has not increased the fare for many years?
Q 31.
Under monopolistic competition, all the customers have perfect knowledge of the market conditions.
Q 32.
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 33.
Although there are few (more than one) firms in oligopoly. Even these firms can enjoy monopoly power. How?
Q 34.
"A day without selling costs is nearly impossible". Comment.
Q 35.
Under monopolistic competition, a firm faces a perfectly elastic demand curve.
Q 36.
What is meant by prices being rigid? How can oligopoly behaviour lead to such an outcome?
Q 37.
Explain the feature of few firms in an oligopoly market.
Q 38.
Compare between perfect competition and monopoly.
Q 39.
What do you mean by duopoly?
Q 40.
In which form of market there is product differentiation?
Q 41.
Give the meaning of Oligopoly'.
Q 42.
What is meant by price rigidity, under oligopoly.
Q 43.
Suppose that the demand curve for the XYZ company slopes downward and to the right. Would you conclude that the firm is a price taker or a price maker? Give reasons.
Q 44.
Draw a demand curve in different market situation and also compare its elasticity of demand.
Q 45.
If the firm in the toothpaste industry have the following market shares, which market structure would best describe the industiy? [1 Mark]
Q 46.
A monopolist can sell any quantity he likes at a price. Give reasons with true or false.
Q 47.
Average revenue will always be equal to marginal revenue in all market conditions. Defend or refute.
Q 48.
Explain why the demand curve facing a firm under monopolistic competition is negatively sloped?
Q 49.
Under monopolistic competition price discrimination can be made easily.
Q 50.
Discuss the relationship between total revenue, average revenue and marginal revenue under perfect competition and monopolistic competition. Use diagrams.
