Market Types — Set 5
Economics · बाजार के प्रकार · Questions 41–50 of 50
Which market structure has the largest number of sellers?
Correct Answer: D. Perfect Competition
Perfect competition is defined by a very large number of small firms. No single firm has enough market power to influence the price. This leads to the most competitive environment for consumers.
In which market structure are products identical or homogeneous?
Correct Answer: B. Perfect Competition
Homogeneous products are a key characteristic of perfect competition. This means consumers see no difference between products sold by different firms. Agricultural commodities like wheat or rice often come close to this.
Which market structure is characterized by a single seller?
Correct Answer: B. Monopoly
A monopoly occurs when there is only one provider of a good or service in the market. This gives the firm complete control over the supply. Historical examples include the East India Company.
Which market structure has a few large firms dominating the industry?
Correct Answer: C. Oligopoly
Oligopoly exists when a small number of firms account for the majority of market sales. Examples include the global smartphone market and the Indian cement industry. These firms are highly interdependent.
Branding and advertising are most common in which market type?
Correct Answer: A. Monopolistic Competition
Firms in monopolistic competition use heavy advertising to differentiate their products. This helps them create brand loyalty among consumers. Products like soaps, toothpaste, and restaurants fall into this category.
A market with only one buyer is called a?
Correct Answer: A. Monopsony
Monopsony is a market situation where there is only one purchaser of a product. This buyer has significant power to influence the price. An example is the government being the only buyer of certain defense equipment.
Under perfect competition, firms earn only ________ profit in the long run.?
Correct Answer: A. Normal
In the long run, the freedom of entry and exit ensures firms earn only normal profits. Normal profit is the minimum level of profit required to keep a firm in business. This leads to efficient resource allocation.
In which market structure is price determined solely by the forces of demand and supply?
Correct Answer: B. Perfect Competition
In perfect competition, the market price is the result of the interaction of total demand and total supply. Individual firms have no power to set their own prices. They must accept the price decided by the market.
Which market structure involves strategic decision-making due to firm interdependence?
Correct Answer: C. Oligopoly
Strategic behavior is a hallmark of oligopoly because firms must predict their rivals' moves. Any price change or marketing campaign is likely to trigger a reaction from competitors. This often leads to price stability or collusive agreements.
An agreement between firms to fix prices and limit competition is known as a?
Correct Answer: A. Cartel
A cartel is a formal organization of producers that agree to coordinate prices and production. This reduces competition and increases profits for all members. OPEC is the most famous example of a global cartel.