Question

Fill in the blanks with appropriate alternatives given in the brackets:

1. Under perfect competition commodities are ________________ in nature. (homogeneous/ classified/ heterogeneous/ supplementary)

2. _____________ appears in a monopoly market. (product differentiation/ price discrimination/ individual differentiation/ packing differentiation)

3. The price at which demand and supply equate to each other is called _______ price. (general/ equilibrium/ short-run/ reserve)

4. In ________ market, seller creates products differentiation. (competition/ perfect/ pure/ monopolistic competition)

5. Monopolist means __________ competitive. (single seller/ several seller/ single buyer/ several buyer)

Answer 1

1. Under perfect competition commodities are homogeneous in nature.

Under perfect competition, commodities are homogeneous in nature. In other words, the product of each and every firm in the market is a perfect substitute to others’ products in terms of quantity, quality, colour, size, features, etc.

2. Price discrimination appears in a monopoly market.

Price discrimination implies charging different prices for the same product from different buyers at the same time. Because a monopolist is a single seller of a good in the market, he enjoys the freedom to exercise price discrimination.

3. The price at which demand and supply equate to each other is called equilibrium price.

Equilibrium price is the price at which the demand for a good equals the supply of that good. Graphically, it is obtained at the intersection of the demand and supply curves.

4. In monopolistic competition market, seller creates products differentiation.

Product differentiation is an important feature of monopolistic competition. It means that the producers in a monopolistic market sell goods that are different from each other; that is, the goods of no two producers will be the same. They may be differentiated in terms of colour, size, fragrance, etc.

5. Monopolist means single seller competitive.
Monopolist means single seller. In other words, monopolists is the sole seller of a commodity in the market with a large number of buyers.