Industrial Economics-Monopolistic Price Theory, Oligopolistic Interdependence and Pricing [IEcoS (Economic Services) Economics Paper-3]: Questions 1 - 8 of 14

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Question 1

Appeared in Year: 2011

Describe in Detail Subjective▾

Write a note on Rationale of kinked demand curve.

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Explanation

  • The kinked demand curve model assumes that a business might face a dual demand curve for its product based on the likely reactions of other firms to a change in its price or another variable.
    • The kinked demand curve of oligopoly was developed by Paul M. Sweezy in 1939. Instead of laying emphasis on price-output determination, the model explains the …

… (163 more words, 4 figures) …

Question 2

Appeared in Year: 2010

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Analyze how price and output are determined under monopolistic competition.

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Explanation

In a monopolistic competition, since the product is differentiated between firms, each firm does not have a perfectly elastic demand for its products.

  • In such a market, all firms determine the price of their own products.
  • Therefore, it faces a downward sloping demand curve. Overall, we can say that the elasticity of demand increases as the differenti…

… (381 more words, 17 figures) …

Question 3

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Explain the device of production possibility curve.

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Explanation

Production Possibility Curve

  • Production possibility curve is the locus of all those combinations of two goods that a producer can manufacture with the full utilization of the available resources.
  • The curve is also known as a transformative curve, a production frontier curve, a product substitution curve or an opportunity cost curve.

Straight Line Prod…

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Question 4

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What is Market? Who is Consumer?

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Explanation

Market

  • Market is place where buyers and sellers meet for the exchange of goods and services. Market is a place which stimulates trade and enables the buyers and sellers for the distribution and allocation of resources with or without money. Market size depends on the number of buyers and sellers and total money involved.
  • Market is also required for t…

… (152 more words) …

Question 5

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What are the different types of market? Explain the characteristics of perfect competition?

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Explanation

A Market which can be defined as a total number of buyers and sellers in the region or area covered by the attention. The reason or area may include earth, states, country, or cities. There are mainly four types of market structures.

Market Structure

Perfect Competition

  • In a perfect competition market structure, there are many buyers and sellers. All …

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Question 6

Appeared in Year: 2012

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“If firms produce differentiated products, it is neither possible to identify the industry nor possible to draw its supply curve.” Discuss and show how Chamberlin handles the problem. (12 marks)

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Explanation

When a large number of businesses provide rival goods or services that are comparable but imperfect alternatives, monopolistic competition exists. A monopolistic competitive industry has minimal entry requirements, and decisions made by any one firm do not immediately affect those of its rivals.

Monopolistic competition is characterized by the sale …

… (317 more words, 4 figures) …

Question 7

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What are the ways in which a perfectly competitive market may become imperfect? Examine whether advertisement helps an imperfectly competitive market become a perfectly competitive one? (200 words)

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Explanation

A highly competitive market is one that has a large number of buyers and sellers. To order to achieve perfect competition, certain conditions must be met; otherwise, perfect competition will be imperfect.

  • A large number of sellers and buyers indicates the lack of monopolies, oligopolies, and monopsony,
  • Low entry and exit barrier,
  • Every firm creates a …

… (281 more words) …

Question 8

Appeared in Year: 2014

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What do you understand by shifting of a tax? How does a monopolist succeed in shifting the burden of a tax under increasing marginal cost? (10 marks)

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Explanation

Tax shifting: Transfer of tax liability from one entity to another Depending on the elasticity of demand and supply, the incidence of the tax will be split between the producer and the consumer. One can transfer the tax burden more to the wealthy and less to the poor while maintaining the same tax income.

Tax shifting is the process of changing the …

… (291 more words) …