REG. No.

:-
11000803
ROLL No. :- B26
SEC. :-
S1009
PROGRAME CODE :-
3182E
COURSE
:-B.COM(Pro.)-MBA

Barun kumar pandey

 SUMITTED TO

MISS PRABHJOT KAUR

SUBMITTED BY

BARUN KUMAR PANDEY

Q1. A particular car manufacturer regards his business as highly competitive as he is
keenly aware of his rivalry with other car manufacturers. Like others, he undertakes
vigorous advertising campaigns and seeks to convince potential buyers of superior quality
and better style of his automobiles and reacts quickly to claims of superiority by his rivals.
Is this an example of monopolistic competition? Explain.

Answer :-

Yes, this is the example of Monopolistic competition under imperfect because Cars are all
designed for the same purpose, which provide transport for people and goods . no one car
manufacture dominates the market with many competitors providing similar products.

Monopolistic Competitors advertise to convince consumers that their product is better than
others. Advertising may cause profits to their increase or decrease relative . Advertising
increases cost. This market satisfied all the features of monopolistic competition market like:-

* Product Differention

* The expenses on advertisement and publicity are called selling costs

* More can be sold only at lower price

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* Close substation

* Free entry and free exist

Q2. There is practically very few real life instances of perfect competition. Even so it is
debatable if these few examples meet all the criteria of perfect competition. Which industry
would you like to specify for perfect competition in the Indian scenario? Support your
answer with relevant reasons.

Answer

Agricultural market have all the features of perfect competition , it characterised by many small
producers who donot have ability to command the selling price of their products , there exists
knowledge about the market and its price in the market .

Another example is Internet service provider because

* Lowering the price because of the large number of competiting firms

* New firms will finds it easy to enter market

* Competition will ensure that firms attempt to minimize their costs and move towards
productive efficiency.

Q3. The restaurant business comprises of several producers selling differentiated products
priced differently according to quality, ambience, location and other factors. Which market
structure characterizes this business? Critically analyze your answer with appropriate
reasoning.

Answer

Monopolistic competiton market structure is characterizes in restaurant business . it may close

competitive in the market .there is a huge variation in the type of food served in restaurant both
quality and regional variety . this implies that restaurant owners , unlike farmers have some
control over price. Restaurant owner can and do lower price to attract more customers.

Q.4.“Kinked demand curve operates in the mobile phone service provider market.” (Airtel,
TATA Docomo, Vodafone, Reliance etc.).Do you agree with this statement? Explain your
answer critically giving reasons to support your answer.

Answer

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Yes I agree with this statement because kinked demand curve says that if a firm raises prices ,
other firm won’t follow and the firm losses at a lot of business and if a firm lower prices other
firms follow and firms doesnot gain profits.

In the mobile telecommunication industry the product and services differentiation can be as
follow :-

* Differentiation in network coverage

* Differentiation in package

* Differentiation in technology

* Differentiation in customer services

Oligopoly refers to different product & services

Q5 “The Organization of Petroleum Exporting countries (OPEC) comprising of seven Oil

producing Nations is an oligopoly.” Do you agree with this statement? Analyze your
answer giving reasons in support of your argument

Answer

As the seven oil producing comprising with OPEC because PEC is the largest international cartel
aimed at safeguarding the interest of member by price stabilization and regulating market
supply .IN that the buyer is indifferent among all the products , so Petroleum refers to Pure
oligopoly, the features of oligopoly:-

1) Few seller but large number of buyer

2) Homogenous product
3) Huge investment
4) Interdependent decision making

Q6 Perfect competition implies perfect dissemination of information about products and

pricing in the market”. Give an example of a market from the real world where this could
actually happen.

Answer

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 In the real life there is difficult to find the the perfect competition .

Agriculture commodities is the example of Perfect competition market like wheat and corn
product by different farmers is essentially the same . all the buyer and sellers in the market
are effectively price takers.

The wheat market is characterized by almost homogenous product and it has large number of
buyer and seller .

Q7.What is the most important reason for rise and spread of oligopolies in the global
market such as banking and pharmaceuticals? Explain your answer with appropriate
reasoning.

Answer

Banking and Pharmaceuticals is the interdependent of the firm in market . the reason behind the
rise and spread of global market is few firms and the compelition in the market is few.

Q8. Give an example of a monopoly from the Indian economy. Do you think that monopoly
creates inefficiency in the market?

Answer

Monopoly exist does not exist in the real world , in some cases monopoly is exist like Railways
which is the best example of monopoly , since there is no other competitor of railways in the
country i some cases monopoly is exist like Railways which is the best example of monopoly ,
since there is no other competitor of railways in the country it is only one which provide railways
services .

As a mode railways is distant substitute wi is only one which provide railways services .

As a mode railways is distant substitute with roadways , airways .

Railways can be :-

1. Single seller
2. Single product
3. Interdependent decision making
4. Restricted entry

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Q9. Explain if the following companies are a part of perfect competition, monopolistic
competition, monopoly or oligopoly. Give a reason to support your answer.

(a) Lovely professional University

(b) State Bank of India

Answer

(a) LPU is monopolistic competition market because there is many university which deal
with education and there is close substitute from other university
(b) SBI is example of oligopoly because there is number of bank in such market. Entry is not
restricted but the same time it is very difficult to enter on oligopoly due to requirement of
huge investment.

Q10. If I sell a perfume concentrate which goes as raw material into manufacture of
perfumes, I could be a part of perfect competition, but if I sell branded perfumes, I
could be a part of monopolistic competition.” Critically analyze this statement.

Answer

In the above question ,there is two condition which show perfect competition and
monopolistic competition

(a) If I sell a perfume concentrate which goes as raw material into manufacture of
perfumes, I could be a part of perfect competition
Because there are many number of supplier of raw material of perfume which is
homogenous in nature and the price is fix or set by the raw material industry .

(b) but if I sell branded perfumes, I could be a part of monopolistic competition

because there is other more company of perfumes which competitive with my
company but different product and style . there is also close substitution with other
company.

Q11. Give an example of an oligopoly from the Indian market.

Answer

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THERE are many example of oligopoly

1. cement manufacture like birla

2. iron and steel like tata
3. motor cycle manufacture like herohonda
4. bank like pnb

because they are :-

a. few seller
b. huge investment
c. strong consumer loyalty for existing brands
d. interdependent decision

Q12. The demand curve is perfectly elastic in perfect competition but downward
sloping in monopolistic competition.” Explain this statement taking examples from
the real world.

Answer
In perfect ompetition the demand curve is perfectly elastic which shows alternative
combination of price and output available to the buyers ,the buyer would demand more of
the product at lower price and less at higher price other may constant , the demand curve
for a individual firm is a horizontal straight line showing that the firm can sell infinite
volume of output at the same price.
Example :- Agriculture commodities

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 The main reason behind the negative slope is that these firms sell heterogonous products
which are close substitute of each other the substitutes of each other , the substitution
effect results in the negative slope.
Example :- Railways

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Q13 Analyze if following companies are a part of perfect competition, monopoly,
monopolistic competition or oligopoly.

(a) Google

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 (b) Kingfisher Airlines

Answer

(a) Google is oligopoly market because there is few searching website or social networking
website . for starting website there is huge requirement investment . there is also google
and yahoo is close substitutes .
(b) Kingfisher airlines is also the example of oligopoly because in the market of airlines there
is few airlines company which provide air transport facilities and there is entry barrier in
airlines because of huge investment.

Q14 . An increase in the demand for films is likely to increase salaries of actors and
actresses. Is long run supply curve for films likely to be horizontal or upward sloping?

Answer

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Barun kumar pandey