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ANSWERS

Ans.1) Yes, this is an example of monopolistic competition


because in monopolistic competition there are large no. of buyers
and sellers and have a full control over market same as in this of
car industry many companies exist in market and large no. of
buyers are there. So, each of these sellers make the product
different or unique by some differentiation and also has full
control over the small section of the market.
Ans.2)
Ans.3) Monopolistic market structure identified this business
because in this case of restaurants consumer have imperfect
knowledge about the selling cost because every restaurant have
different types of expenditure or price according to their location ,
quality etc. .Every restaurant have there independent decision
making about changing their price and other things.so they have
unrestricted entry and exit from market. So, this comes under the
monopolistic market.
Ans.4)
It comes under the oligopoly ,this is a situation where there a very
few sellers who come together to make a cartel.
Kinked demand is formed when if one company reduces the price
then other also do the same because of the competition but if it is
one company increases its price other will be keep their price
constant.

Ans.5) Yes, I agree with this statement because oligopoly itself


implied a market dominated by a few seller . However any of the
market in which a small number of large firms compete may be
termed as oligopoly. In this all the seven oil producing nations are
selling homogenous products under continuous consciousness of
actions.
Ans.6)

Ans.7) Reason of rising in the price of Oligopoly are as given


below….
1)In oligopoly sellers change the market demand by
changing their products.
2)Because of the few sellers in market the competition is
not that much hard.
3) Oligopoly
is the competition in which competition arises
by the other factors apart from price like advertisement
etc.

Ans.8) The best example for the Monopoly Competition is


Indian Railway.
Yes, I think this creates inefficiency in the market
because as In this case of Indian Railway they do not
have to be very efficient and innovative because they
have no competition in the market ,what do decide the
buyer have to agree with that no one can deny or change
their decision.
Ans.9) a) LPU is the example of monopolistic competition
as there have already many competitors in the market
ex. IIPM,SYMBOISES, AMITY,PU etc.
b) SBI is also the example of monopolistic competition
,they too have many contenders in the market for ex.
PNB, ICICI, HDFC etc.
Ans.10) 2 different cases are discussed in question,
in first case as I am the seller of a raw material I comes
under the perfect competition the simple reason behind
this is then I have to except the price offered to me I will
be a price taker then and
in second case if I am selling a branded perfume then I
come under the monopolistic competition because then I
will be a price maker. I can decide by my own price
according to the quality of product and other
expenditures.
Ans.11) Airtel and J.P Cement

Ans.13) GOOGLE comes under the oligopoly competition


because the there are very few competitors they have in
market like YAHOO etc.
KINGFISHER AIRLINES comes under the monopolistic
competition as they have many contenders in the market
like SPICE JET, AIR INDIA, GO AIR, JET AIRLINES etc.
Ans.14) It will be horizontal because increase in the
income of factors is not because of the change in the
price of anything but in increases because of some other
factor like in this case actors income increases due to the
increase in demand for films.