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UNIT – V PART - A

1. State the meaning of monopolistic competition. (APRIL 2012) or Define


monopolistic competition. (NOV 2016)
A perfect competition exists when there are many small competitors carrying similar
products, giving you plenty of options from which to choose. The opposite of this is
a monopoly, in which there's only one option and, therefore, no choice for the consumer. The
third form of competition, an oligopoly, exists when there are only a few, large competitors in
the market. The fourth and final form of competition is called monopolistic competition.
2. Define imperfect competition. ( APRIL 2013) What is imperfect competition?
(APRIL 2012)
Imperfect competition exists whenever a market, hypothetical or real, violates the abstract
tenets of neoclassical pure or perfect competition. Since all real markets exist outside of the
plane of the perfect competition model, each can be classified as imperfect.
3. Define oligopoly competitions. ( APRIL 2013)
An oligopoly is a market where only a few firms make up the entire industry. These firms
have all the control over important factors like price. Often, the products of all the
dominating firms are extremely alike, which forces the firms to become interdependent and
closely monitor the actions of the other firms they are competing against.
4. Classify markets on the basis of area. (APRIL 2014)
The four basic types of markets are:
1) Perfect competition
2) Monopoly
3) Monopolistic competition
4) Oligopoly

5. State the three characteristics of monopolistic competition. (APRIL 2014)


 Large number of firms
 Differentiated product (ie- Substitutes)
 Freedom of entry and exit
6. What is a perfect competition? (APRIL 2015) (APRIL 2017)
Perfect competition: A market structure in which there are many buyers and sellers, the
product is standardized, and sellers can easily enter or exit the market. In a perfectly
competitive market, each buyer and seller is a price taker.
7. What is duopoly? (APRIL 2015) (APRIL 2016)
A duopoly is the most basic form of oligopoly, a market dominated by a small number of
companies. A duopoly can have the same impact on the market as a monopoly if the two
players collude on prices or output.
8. What is a market? (APRIL 2016) (NOV 2012)
A market in which buyers and sellers have complete information about a particular product
and it is easy to compare prices of products because they are the same as each other etc.
9. What is monopsony? (NOV 2012)
A monopsony, sometimes referred to as a buyer's monopoly, is a market condition similar to a
monopoly except that a large buyer, not a seller, controls a large proportion of the market and
drives prices down. A monopsony occurs when a single firm has market power in employing
its factors of production.
10. When is a market said to be imperfect? (NOV2013)
o Large number of Sellers and Buyers: There are large numbers of sellers in the market.
o Product Differentiation: Another important characteristic is product differentiation.
o Selling Costs.
o Free Entry and exit of Firms.
o Price-makers.
o Blend of Competition and Monopoly.
11. Who is a monopolist? (NOV 2013)
A monopolist market can be defined as one m which there is no perfect substitute for the
product of an individual seller so that there is a separate demand curve for the product of each
seller in the market".
12. What is a perfect competition? (APRIL 2015) (APRIL 2017)
Perfect competition: A market structure in which there are many buyers and sellers, the
product is standardized, and sellers can easily enter or exit the market. In a perfectly
competitive market, each buyer and seller is a price taker.
13. What is duopoly? (APRIL 2015) (APRIL 2016)
A duopoly is the most basic form of oligopoly, a market dominated by a small number of
companies. A duopoly can have the same impact on the market as a monopoly if the two
players collude on prices or output.
14. What is meant by monopoly? (NOV 2015)
Definition: A market structure characterized by a single seller, selling a unique product in the
market. In a monopoly market, the seller faces no competition, as he is the sole seller of
goods with no close substitute.
15. What is oligopoly competition? (NOV 2016)
A competitive oligopoly is a market that is dominated by only a few large firms. These firms
prefer not to compete via price wars and therefore compete in various other ways, such as
advertising, product differentiation and barriers.