MODULE – 4: IMPERFECT COMPETITION

Short Answer Type Questions – 2 marks

1. What is ‘imperfect competition’?
2. Define a cartel. Cite examples.
Ans:
Cartel is a formal agreement among oligopolists to
set-up a monopoly price, allocate output, and share
profit among members.
Ex-international oil market where there are very few countries those who have oil
Ex- gems or diamond minning
3. Define a collusion. Cite examples.
Ans:
Collusion is a formal or an informal agreement
among oligopolists to adopt policies that will restrict
or reduce the level of competition in the market.
Ex-
4. What is a ‘natural monopoly’?
5. What is ‘product differentiation’?

Medium Answer Type Questions – 5 marks

1. Discuss the characteristics of a monopoly market?
2. Describe the characteristics of monopolistic competition.
3. Describe what characterizes an oligopoly market?
4. Distinguish between monopoly and monopolistic competition.
5. Distinguish between monopoly and oligopoly.
6. Explain why a monopolist firm is not a ‘price taker’.
7. Give an example of monopolistically competitive market from real life. Cite rationale.
8. Explain the difference between ‘monopoly’ and ‘monopsony’ with examples.
9. Explain the difference between ‘oligopoly’ and ‘oligopsony’ with examples.
10. Explain the difference between ‘perfect’ and ‘imperfect’ oligopoly with examples.

Long Answer Type Questions – 10 marks

1. Illustrate the various types of market structure under imperfect competition.
2. Discuss the different types of monopoly that could exist in the market.
3. Explain the sources which provide the ‘market power’ to a monopolist.
4. Describe the causes for which the situation of an oligopoly arises in a market.
5. With examples discuss how ‘product differentiation’ characterizes the core structure
of monopolistic competition.