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The word ‘Franchisee’ has its origin in the Anglo-French word ‘Frankese’, which means ‘free’.

1. Time 

2. True 

3. False. Selling cost is the cost of selling a Product.

a. 4. There is single seller

b. 1. They may be jointly demanded 

c. 2. Less than equilibrium price

a & c Oligopoly, 

b & d Perfect competition

Yes, I agree to the statement that the monopolist cannot determine the price and quantity simultaneously. This is because, if the monopolist wants to sell more of the commodity, he needs to reduce the price. Therefore, he can change either of the price or the quantity.

The firm will produce oq1 level of output to maximise the profit. Because at this level of output, the firm satisfies a condition that is MR = MC. Since the firm faces zero cost its MR also will be zero. For this equilibrium, MR and MC should be equal. Since MC is zero in all level of output the firm will produce at a level where its MR is zero.

1. Oligopoly – only a few producers

2. Perfecly Competitive Market – large number of producers 

3. Monopolistic Competition – Many sellers producing differentiated products

1. TR = 20Q – 2Q²

AR = \(\frac{TR}{Q}= \frac{20Q - 2Q^2}{Q} = 20 - 2Q\)

^{MR = \(\frac{\delta TR}{8Q}\) = \(\frac{(20Q - 2Q^2)}{Q}\) = 20 - 4Q}

2. Monopoly

1

2. Monopoly. 

3. relationship between TR, AR & MR 

• TR rises and then falls 
• AR is always falling but lies above MR 
• MR falls and becomes negative

A monopolist maximises profit at that level of output for which the MC = MR and MC is rising. In other words, monopolist maximises profit at that level of output for which the vertical difference between TR and TC is maximum and TR is above the TC. In this level, the rm produces half of the market demand.

The demand curve faced by a firm under monopolistic competition is negatively sloped because a firm under monopolistic competition could sell more of the commodity only by reducing the price.

Respected teachers and dear friends, The topic of my seminar paper is noncompetitive markets. As we know there are different kinds of markets depending upon the number of firms, nature of the product, freedom of entry and exit, etc. On the basis, of the above, we name the non competitive markets as monopoly, monopolistic competition and oligopoly.

Introduction: 

A market structure in which there is a singe seller is called monopoly. A market structure where the . number of firms is large, there is free entry and exit of firms, but the goods produced by them are not homogeneous. Such a market structure is called monopolistic competition. If the market of a particular commodity consists of more than one seller but the number of sellers is few, the market structure is termed oligopoly.

Contents: 

1. Monopoly market 

2. Monopolistic competition 

3. Oligopoly

1. MONOPOLY MARKET: 

Monopoly may be defined as a market situation in which there is only a single seller. He controls the entire market. The term monopoly has derived from two Greek words such as ‘mono’ means single and poly means ‘seller’. The meaning of the combined term is single seller. In a boardersense, a monopolist is single seller of a commodity which does not have close substitutes, e.g. KSEB

Features of Monopoly Market: Some of the salient features of monopoly are as follows: 

1. There is only a single firm producing the product 

2. There is no close substitute for the product 

3. Entry is denied for other producers 

4. Since there is only one seller, the firm and the industry are same 

5. The firm under monopoly is the price maker

2. MONOPOLISTIC COMPETITION: 

Monopolistic competition is a market characterized by the elements of perfect competition and monopoly. It is a market situation characterized by large number of firms producing various kinds of goods and services. The products of a firm will be different from the products of other firms in terms of size, shape, smell, colour, etc. 

Features 

The salient features of perfect competition are as follows: 

1. Large number of buyers and sellers: 

Under monopolistic competition, there exists large number of buyers and sellers. But the number of sellers will be less compared to perfect competition. 

2. Product differentiation: 

One of the most important characteristic of monopolistic competition is the existence of product differentiation. Each firm has its own product with unique brand names. The products of one firm will be different from the products of other firms in terms of size, shape, smell, color, etc.

3. Freedom of entry and exit: 

Under monopolistic competition, there is freedom of entry and exit. 

4. Selling cost: 

The cost incurred for sales promotion such as advertisement, coupons, gifts, etc. are known as selling cost. Under monopolistic competition, the selling costs would be relatively high. 

3. OLIGOPOLY: 

The term oligopoly has derived from two terms oligo (small) and poly (seller). Thus oligopoly is a market situation characterized by competition among few sellers. In simple terms, it is a competition among few sellers in the market selling either homogenous or differentiated product. The industries manufacturing car, motorcycle, scooter, etc. are some of the examples for oligopolistic competition.

The main features of oligopolistic competition are as follows: 

1. Few sellers: 

The number of sellers or producers would be few under oligopolistic competition. 

2. Homogeneous or differentiated products: 

The products sold under oligopolistic competition would be either homogeneous (e.g. gas, petrol) or differentiated (e.g. car, scooter) 

3. Free entry and exit: 

Free entry and exit persist under oligopolistic competition. 

4. Selling cost: 

Firms spend on advertisement and sales promotion. 

5. Interdependence of the firms: 

Since the number of firms under oligopoly are few, they are highly interdependent. The action of one firm will certainly have impact on other firms in terms of price, quality of the product, etc.

6. Price leadership: 

Some of the firms may emerge as price leaders under oligopoly. The price leader could be the first firm in the industry or the firm with largest number of consumers. The price leader takes important decisions regarding vital decisions such as the price of the product or number of units to be produced in the market, etc.

Conclusion: 

Thus it can be concluded that there are three kinds of non-competitive markets. This classification is made on the basis of the number of firms, nature of the product, freedom of entry and exit, etc. In contrast to perfect competition, we nd that these market forms are more realistic.

1. Selling cost. Others are features of monopoly 

2. Price maker. Others are features of monopolistic competition 

3. No transport cost. Others are features of oligopoly 

4. Post and Telegraph. Others are private sector companies.

1. Figure (1) represents perfect competition market Figure (2) represents monopoly market.

2. In perfect competition, there are large number of buyers and sellers. Each firm is a price taker and there is uniform price prevailing in the market. Since each unit is sold at uniform price, P = MR = AR in the market. Therefore, demand curve is horizontal straight line. However, in a monopoly market, firm is a price maker. He can vary the price. If he wants to sell more of the product, he need to reduce the price. Therefore, the demand curve is falling downward.

• Price maker – Monopoly
• Price leadership – Oligopoly 
• Single buyer – Monopsonist 
• Selling cost – Monopolistic competition.

(c) Both Monopolistic competition & Oligopoly

A firm under perfect competition is a price taker and have a horizontal demand, but a firm under monopolistic competition is a price maker and faces a demand curve that in downward sloping and elastic. Under perfect competition MR = AR. So the firm produces more output and charge less compared to monopolistic competition. 

Under monopolistic MR < AR.

1. False. Products in perfect competition are homogenous 

2. True

3. True 

4. False. Duopoly is a market situation in which two sellers supply the commodity 

5. False. Selling cost is the cost for selling or giving publicity for the commodity

Price rigidity is an important feature of oligopoly. Price rigidity means that price will remain rigid without much fluctuation. This is because, price increase by one firm will not be followed by other firms. 

However, price reduction by one firm will be followed by other firms, due to this; the firm affecting price change will not get the benefits from the reduction of price. Therefore, no firm will reduce or increase the price. This leads to a situation of price rigidity in the oligopoly markets.

Monopoly may be defined as a market situation in which there is only a single seller. He controls the entire market. The term monopoly has derived from two Greek words such as ‘mono’ means single and poly means ‘seller’. The meaning of the combined term is single seller. In a boarder sense, a monopolist is single seller of a commodity which does not have close substitutes.

E.g. KSEB

Features of Monopoly Market Some of the salient features of monopoly are as follows:

(1) There is only a single firm producing the product

(2) There is no close substitute for the product

(3) Entry is denied for other producers

(4) Since there is only one seller, the firm and the industry are same

(5) The firm under monopoly is the price maker

1. Monopoly 

2. Perfectly Competitive Market 

3. Monopoly 

4. Perfectly Competitive Market 

5. Monopoly

(b) The profit maximising level of outputs is 6, where the difference between TR and TC is highest.

The long run equilibrium conditions in a monopolistically competitive industry are: 

MR = LMC P = LAC but P > LMC MR = LMC P = LAC, P > LMC

1. Perfect competition 

• Large Number of Producers. 
• Productive Eciency in the Long run 
• Homogeneous products 
• Long run Price = MC 
• Zero Barriers 
• Price Takers

2. Monopolistic competition 

• Differentiated products 
• Some Pricing power 
• Low Barriers, 
• Many producers 
• Productive Inefficiency in the 
• Long run Long run Price >MC

Only a single seller with complete control over industry.

(c) Imperfect competition

Price rigidity is an important feature of oligopoly market. In oligopoly market, price does not change m easily in response to change in demand. If one firm decides to increase the price to earn high profit and the other firms do not do so, due to increase the price, the demand of product will fall and it causes fall in revenue and profit. Hence it is not rational for any firm of increase the price. Thus in an oligopoly market, price remain rigid.

1. Indian Railways – monopoly 

2. Toothpaste – monopolistic competition 

3. Hero Honda – oligopoly 

4. KSEB – monopoly

Correct answer is (C)

(c) Both Monopolistic competition & Oligopoly

(a) True 

(b) False – price maker 

(c) False – a feature of Oligopoly 

(d) False – a feature of monopolistic competition 

(e) True 

(f) False – called monopsony

(ii) A market situation with only a few sellers

(d) Large number of firms selling differentiated products

Correct answer is (b) duopoly

These are three possibilities:

(i) If the relative (percentage) increase in demand is greater than the increase in supply, price will rise. The price will rise because of excess demand in the market.

(ii) If the relative (percentage) increase h demand is less than the increase in supply, price will fall. The price falls because of excess supply in market.

(iii) If the relative (percentage) increase in demand is equal to the increase in supply, price will remain unchanged.

The price will remain unchanged because there is neither excess demand nor excess supply in the market.

(i) When market price is higher than equilibrium price: There is excess supply and producers are not in a position to sell all they want to sell at the given price. This leads to competition between producers. Competition between producers leads to lowering of price.

Lowering of price raises demand which reduces supply. This continues till demand is equal to supply again at the original equilibrium.

(ii) When market price is lower than equilibrium price: There is excess demand and consumers are not in a position to buy all they want to buy at the given price. This leads to competition between consumers. Competition leads to rise in price.

Rise in price reduces demand while raises supply. This continues till demand is equal to supply again at the original equilibrium.

When marginal utility is negative, total utility starts declining.

A Production Function is a technological relationship between physical inputs and physical outputs of a good which shows the maximum outputs that can be produced with combination of inputs.

Mathematically, the Production Function can be written as:

Q_x = f(F₁, F₂,F₃...F_n)

Where Q_x is the physical output of commodity X and F₁ ... F_n, are the physical inputs required in the production of output X.

Difference between Short Run and Long Run Production Function are:

(i) False, Average cost falls only when MC < AC, Average cost can fall even when MC is rising.

(ii) True, The difference between AC and AVC is true to AFC. As output increases AFC decreases, so the difference between AC and AVC decreases.

Average Cost will rise only when Marginal Cost rises.

False, rise in AC takes place when MC is greater than AC and not necessarily when MC rise.

Total utility increases when marginal utility is positive

Receipts from sale of a good.

           Or

Market value of the output produced is called Revenue.

(i) The sum of marginal utilities.

Total utility is the sum of all marginal utilities.

TU_n=MU₁ + MU₂ + MU₃ +........... MU_n = ∑MU

If a good can be used for many purposes, the demand for it will be more elastic because with a decrease in its price it is put to several uses and with a rise in its price it is withdrawn from its many existing uses. So that, there is a considerable change in demand in response to some change in price.

(d) All of these