ANSWER:1

In economic theory, perfect competition occurs when all companies sell identical
products, market share does not influence price, companies are able to enter or exit
without barrier, buyers have perfect or full information, and companies cannot determine
prices. In other words, it is a market that is entirely influenced by market forces. It is the
opposite of imperfect competition, which is a more accurate reflection of a current
market structure.

Consider a farmers market where each vendor sells the same type of jam. There is little
differentiation between each of their products, as they use the same recipe, and they
each sell them at an equal price. At the same time, sellers are few and free to participate
in the market without any barrier. Buyers, in this case, would be fully knowledgeable of
the product’s recipe, and any other information relevant to the good.
Emergent tech: Often, as in the case of early online retailers, there are no clear market
advantages, and many tech companies offer basically the same services for similar prices.
An example is early social media companies—several new firms offered comparable
services for virtually the same price.
Discount brands: There may be cheaper versions of the same product in supermarkets,
such as cereal made by the different brands. None of these substitutes will be
significantly different in quality or price, so they resemble a perfectly competitive market.

ANSWER:2
Oligopoly is a fascinating market structure due to interaction and interdependency between
oligopolistic firms. What one firm does affects the other firms in the oligopoly.
Since monopolistic competition and oligopoly are intermediary market structures, the next
section will review the properties and characteristics of perfect competition and monopoly.
These characteristics will provide the defining characteristics of monopolistic competition
and oligopoly.
An oligopoly is defined as a market structure with few firms and barriers to entry.
Oligopoly = A market structure with few firms and barriers to entry.
There is often a high level of competition between firms, as each firm makes decisions on
prices, quantities, and advertising to maximize profits. Since there are a small number of
firms in an oligopoly, each firm’s profit level depends not only on the firm’s own decisions,
but also on the decisions of the other firms in the oligopolistic industry.

ANSWER:3
MRTP Act, is the first competition law made in India, which covers rules and regulations
relating to unfair trade practices.
It is based on the pre liberalisation and globalisation era.
The objective of the Act is to prevent concentration of economic power to
common detriment to control of monopolies, prevention of monopolistic and
restrictive trade practices. 
Determined by firm’s size.
It lists out 14 offences, which are against the principle of natural justice.

Competition Act, is implemented to promote and keep up competition in the economy

and ensure freedom of business.

It is based on the post-reforms scenario.

The objective of the Act is prevent practices having adverse effect on competition and to
promote as well as sustaining the competition to protect consumer interests at market
place and ensuring freedom of trade.

Determined by firm’s structure.

It recognizes only 4 offences, which are deemed to be against the principle of natural
justice.

ANSWER:4
The primary economic role of the government should be to create an enabling
environment where competitive private activity can flourish. Unfortunately , in India, the
government does too much of the activity itself and too little of the enabling. In the early
post-Independence years, with private sector capacity limited, government forays into
steel, heavy electricals and even electronics may have been useful, and even critical for
our subsequent growth. 

State ownership in many areas no longer serves the public interest, and the only reason
it continues is that it serves many vested interests, including private competitors who
find protection in public inefficiency. Disinvestment is no answer, for it preserves all the
ills of government ownership while allowing the public sector firms more resources that
the government can influence. 

It is a violation of the rights of minority shareholders when the government continues to

treat public sector firms as an extension of the government and forces them to do its
unprofitable bidding. What we need for many of these firms is a strengthening of
corporate governance and then a return to full public ownership through a public
offering. 

ANSWER:5
The directive principles enshrined in Indian constitution reflect that India is a Welfare State
founded based on the concept of equal opportunities and equitable wealth distribution aimed
at protecting people by playing an integral role in reducing Socio-Economic inequalities and
disparities. A Welfare State fundamentally focusses on assuring equitable standards of living
for all and plays a pivotal role in protecting and promoting the economic and social well
being of the citizens by facilitating an inclusive economic growth.
It also aims at providing economic growth and balance, social justice and improving the
standards of living. The primary responsibility of alleviating the poverty, eradicating social
and economical inequalities and enhancing the literacy rate are vested with the State. India,
being a Democratic Welfare Nation, represents a fairly good conjunction of the compulsions
of political freedom, social justice and economic reforms. With a federal system of
governance in place, the policies formulation of the states, many a time, may not be in tune
and line with the national policy framework.

In a quest to improve the electoral prospects by gaining a political mileage, the states, quite
an often, rush to announce populist welfare measures which may have an adverse impact in a
long run by impeding the overall developmental activities due to the paucity of financial
resources. Though the constitutional provisions provided a framework for demarcation of
different subjects between Centre and States by division of legislative and executive powers,
the jurisdictional overlapping of certain subject areas due to ambivalence results in strained
Centre and States relations. The Centre plays a role in formulating a Nation Wide policies
and programs besides guiding and coordinating the implementation process by the states.
In concept, Free Market Economy is self-regulatory in nature which paves a way for a fair
competition in the markets resulting in faster economic growth and consumer welfare. It is a
proven and established fact that freely operating markets backed and facilitated by the
government are conducive to social welfare by gearing up the economy. An active regulation
of the economy by the governments with frequent interventions, except for combating market
imperfections, is generally considered to be counterproductive.

ANSWER:6
Jio’s Onslaught of the Indian Telecommunication Market
 Reliance Jio Infocomm Limited released its free data and voice scheme ‘Jio welcome offer’
which was further extended till December. Next, it introduced Happy new year offer which
extended the previous plan till 31 March, 2017. Even in 2018 and now in 2019, it is charging
nominal rates to provide high speed data and voice which instigated the Indian digital
revolution. For the first time in India, humongous investments were done and a new entrant
penetrated the telecommunication market which was held tightly by few incumbents.
They successfully penetrated the market within a year. However, their zero pricing strategy
was declared predatory and anti-competitive. They were on thin ice, where a single
characterisation of dominance demarcated them from being penalised for anti-competitive
behavior. This portrays the beginning of a new era for Indian competition law, where a
revolutionary pricing strategy was applied which provided the consumers utopian incentives.
The spotlight of our attention should be focused on a particular phase ‘penetration’ and its
relation and position with Indian Competition Law. It remains a gray area and has
demonstrated potential to renovate the competition law scenario in India.
An interesting perspective can be extracted from Telecom Regulatory Authority of India’s
(TRAI’s) ruling concerning the predatory price allegation on Jio. Jio made its mark on the
telecommunication market when it started providing free data and voice services .
Consequently it generated a gargantuan shift in the consumer base. Even when they started
charging for their services, it was still a fraction of what its rivals (Airtel, Vodafone and Idea)
were charging. TRAI amended the predatory pricing rule which caused a disruption in the
market, especially for the rivals of Jio. It permitted Jio to continue with its low pricing but
barred its rivals to reduce their current prices to tackle competition. It reasoned that the rivals’
existing position would cause abuse, whereas, Jio being a new entrant was inept to abuse . It
also scrapped traffic volume as a parameter for establishing market power, which gave
absolute immunity to Jio, as it was experiencing huge growth in terms of traffic volume.
However, these changes were nullified by the sectoral appellate tribunal, when the rivals
challenged them on the merits of intent and capability of Jio. The  sectoral appellate tribunal
observed that TRAI’s changes offered ‘artificial protection’ to the entrant and as a counter-
measure allowed the rivals to offer cheap rates to compete with the low tariffs of Jio. Two
polar views can be observed here, while TRAI directly allowed penetrative pricing as it
granted the relaxations to Jio due to its nascent position , the appellate tribunal rejected the
merit of market  penetration through low pricing, thereby rejecting the theory of penetrative
pricing by ignoring the entrant’s position and denying it the benefit of newcomer’s
promotional pricing opportunity.