Class 12 Micro Economics - Chapter Non-competitive Markets NCERT Solutions | List the three different ways in which o
List the three different ways in which oligopoly firms may have.
Oligopoly firms may behave in the following three ways:
1) Cartel - In order to avoid undue competition, oligopolistic firms may engage in formal agreements or contracts. This will not only allow them to maximise their total profits together, but also capture a significant market portion.
2) Informal understanding - Each firm may decide on its own, how much units of output are to be produced for maximising its individual profit, assuming that other firms would not change their strategies and decisions regarding the units of output to be produced.
3) Advertisement and differentiated product - It may happen that the firms realise that price competition will leave them nowhere and consequently they emphasise more on advertising their products. It will enable them to capture the minds of consumers and indirectly increase their market portion.
More Questions From Class 12 Micro Economics - Chapter Non-competitive Markets
- Q:-
Will the monopolist firm continue to produce in the short run if a loss is incurred at the best short run level of output?
- Q:-
A monopoly firm has a total fixed cost of Rs 100 and has the following demand schedule:
Quantity
1
2
3
4
5
6
7
8
9
10
Marginal
Revenue
100
90
80
70
60
50
40
30
20
10
Find the short run equilibrium quantity, price and total profit. What would be the equilibrium in the long run? In case the total cost is Rs.1000, describe the equilibrium in the short run and in the long run.
- Q:-
If duo poly behavior is one that is described by Cornet, the market demand curve is given by the equation q = 200 - 4p and both the firms have zero costs, find the quantity supplied by each firm in equilibrium and the equilibrium market price.
- Q:-
Comment on the shape of MR curve in case when TR curve is a
(a) Positively sloped straight line
(b) Horizontal straight line
- Q:-
From the schedule provided below calculate the total revenue, demand curve and the price elasticity of demand:
Quantity
1
2
3
4
5
6
7
8
9
Marginal
Revenue
10
6
2
2
2
0
0
0
-
- Q:-
What would be the shape of the demand curve so that the total revenue curve is?
(a) A positively sloped straight line passing through the origin?
(b) A horizontal line?
- Q:-
What is meant by prices being rigid? How can oligopoly behavior lead to such an outcome?
- Q:-
If the monopolist firm of Exercise 3 was a public sector firm. The government set a rule for its manager to accept the government fixed price as given (i.e. to be a price taker and therefore behave as a firm in a perfectly competitive market). And the government has decided to set the price so that demand and supply in the market are equal. What would be the equilibrium price, quantity and profit in this case?
- Q:-
The market demand curve for a commodity and the total cost for a monopoly firm producing the commodity are given in the schedules below.
Quantity
0
1
2
3
4
5
6
7
8
Price
52
44
37
31
26
22
19
16
13
Quantity
0
1
2
3
4
5
6
7
8
Price
10
60
90
100
102
105
109
115
125
Use the information given to calculate the following:
(a) The MIR and MC schedules
(b) The quantities for which MIR and MC are equal
(c) The equilibrium quantity of output and the equilibrium price of the commodity
(d) The total revenue, total cost and total profit in the equilibrium
- Q:-
Explain why the demand curve facing a firm under monopolistic competition is negatively sloped.
Popular Questions of Class 12 Micro Economics
- Q:-
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- Q:-
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- Q:-
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- Q:-
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- Q:-
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- Q:-
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- Q:-
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- Q:-
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- Q:-
What is budget line?
Recently Viewed Questions of Class 12 Micro Economics
- Q:-
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- Q:-
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- Q:-
Suppose the demand and supply curves of salt are given by:
(a) Find the equilibrium price and quantity.
(b) Now, suppose that the price of an input that used to produce salt has increased so, that the new supply curve is qs = 400 + 3p
How does the equilibrium price and quantity change? Does the change conform to your expectation?
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- Q:-
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- Q:-
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but the price of good 1 and the consumer’s income remain unchanged? - Q:-
Suppose there are 20 consumers for a good and they have identical demand functions:
d(p)=10–3pd(p)=10–3p for any price less than or equal to 103103 and d1(p)=0d1(p)=0 at any price greater than 103.
- Q:-
A shift in demand curve has a larger effect on price and smaller effect on quantity when the number of firms is fixed compared to the situation when free entry and exits is permitted. Explain.
- Q:-
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- Q:-
Consider a market where there are just two consumers and suppose their demands for the good are given as follows:
Calculate the market demand for the good.
p
d1
d2
1
9
24
2
8
20
3
7
18
4
6
16
5
5
14
6
4
12
- Q:-
Explain why the budget line is downward sloping.
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