Market Types — Set 1
Economics · बाजार के प्रकार · Questions 1–10 of 50
Which market structure is characterized by a single seller of a product with no close substitutes?
Correct Answer: C. Monopoly
A monopoly exists when one enterprise is the sole supplier of a particular commodity. This market type usually features high barriers to entry for new competitors. The lack of substitutes gives the seller significant control over the market price.
What is a market situation with only two sellers of a commodity called?
Correct Answer: D. Duopoly
A duopoly is a specific type of oligopoly where only two producers exist in one market. These two firms typically have significant influence over the industry's pricing and output. It serves as the simplest form of limited competition between sellers.
In which market form does a firm act as a 'Price Taker'?
Correct Answer: C. Perfect Competition
Under perfect competition, firms are price takers because they are too small to influence market prices. Individual sellers must accept the equilibrium price determined by market demand and supply forces. Homogeneous products and many buyers/sellers are key features of this model.
Which market type is characterized by 'Product Differentiation'?
Correct Answer: B. Monopolistic Competition
Monopolistic competition involves many firms selling products that are similar but not identical. Companies use branding or quality differences to make their products stand out to consumers. This allows firms to have some degree of control over their individual prices.
The 'Kinked Demand Curve' is a unique feature associated with which market structure?
Correct Answer: A. Oligopoly
The correct answer is 'Oligopoly'. The kinked demand curve explains price rigidity observed in oligopolistic market structures. It suggests that competitors will match price cuts but not price increases made by a firm. This theory was primarily developed to explain why prices stay stable despite cost changes.
A market situation where there is only one buyer for a product or service is known as?
Correct Answer: B. Monopsony
Monopsony occurs when a single buyer substantially controls the market as the major purchaser of goods and services. This gives the buyer the power to dictate terms and lower prices to their suppliers. A classic example is a large company being the only employer in a small town.
In which market structure is 'Interdependence' between firms a major factor?
Correct Answer: B. Oligopoly
In an oligopoly, the actions of one firm significantly affect the decisions and profits of its rivals. Because there are few sellers, firms must consider the potential reactions of competitors when changing prices. This often leads to strategic behavior or the formation of cartels.
What is the term for a market structure with a small number of large firms?
Correct Answer: D. Oligopoly
An oligopoly consists of a few dominant firms that have high market share and influence. Common examples include the automobile, telecommunications, and airline industries. Barriers to entry are usually high, preventing new small players from entering easily.
Which market form features unrestricted entry and exit of firms in the long run?
Correct Answer: B. Perfect Competition
Perfect competition allows firms to enter or leave the industry without any legal or economic barriers. This ensures that firms earn only normal profits in the long run. If abnormal profits exist, new firms enter and drive the price down.
A 'Cartel' is a formal agreement among firms in which market structure?
Correct Answer: D. Oligopoly
The correct answer is 'Oligopoly'. A cartel is a group of independent producers who coordinate to limit competition and fix prices. This behavior is typically found in oligopolies where a few large firms dominate the market. The most famous international example is OPEC in the oil industry.