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Economics · Class 11 Commerce

Ch 5Market Structure and Pricing — Class 11 Economics, concept-first.

In economics, a market is not a single physical place but any arrangement that brings buyers and sellers of a commodity into contact so that a price for it can be determined.

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Key concepts

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Market Structure — Meaning and Classification

Market structure refers to the organisational features of a market — number of sellers, nature of the product, entry/exit conditions, and control over price — used to classify markets into perfect competition (many selle…

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CA Foundation

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Chapter contents

The NCERT structure, section by section. Open a section to see its questions, then read the concept-first solution.

1

Meaning and Classification of Market Structures

In economics, a market is not a single physical place but any arrangement that brings buyers and sellers of a commodity into contact so that a price for it can be determined.

2

Perfect Competition — Price and Output Determination

Under perfect competition, an individual firm faces a perfectly elastic (horizontal) demand curve at the price fixed by the interaction of total market demand and total market supply — the firm can se…

3

Monopoly — Price and Output Determination

A monopolist is the sole seller of a product with no close substitute, so the monopolist's own demand curve IS the market demand curve — downward sloping.

4

Monopolistic Competition — Group Equilibrium and Excess Capacity

Monopolistic competition, a model developed by Edward Chamberlin, describes markets with a large number of sellers offering products that are close substitutes for one another but not identical — real…

5

Oligopoly and the Kinked Demand Curve

An oligopoly is a market dominated by a SMALL number of large sellers, so that each firm is keenly aware that its own price or output decisions will visibly affect its rivals, and that rivals are like…

6

Price Discrimination

Price discrimination occurs when a seller with some market power charges DIFFERENT prices for the SAME product to different buyers or in different markets, where the price difference is NOT justified…

Exercises

+Show 6 questions6 questions
  1. Q5List the four criteria economists use to classify market structures, and use them to briefly distinguish perfect competition from monopoly.Free
  2. Q6Explain why every firm in a perfectly competitive industry earns only normal profit in the long run, even though some firms may earn super-n…Free
  3. Q7Explain why economists say a monopolist has "no supply curve," unlike a firm under perfect competition.Preview
  4. Q8What is meant by "excess capacity" under monopolistic competition, and why does it arise even though every firm earns only normal profit in…Preview
  5. Q9Using Sweezy's kinked demand curve model, explain why oligopoly prices tend to remain rigid even when a firm's marginal cost changes moderat…Preview
  6. Q10State the two conditions that must both be satisfied for a firm to practise profitable price discrimination, and explain why a perfectly com…Preview

Sample & Board Papers

Sample papers and previous-year board questions for this subject.

+Show 26 questions26 questions
  1. Q1Perfect competition assumes ______. (a) Homogenous goods (b) Luxury goods (c) Producer goods (d) Differentiated goodsPreview
  2. Q2Dumping refers to practice of the monopolist charging higher price for his product in the local market and ______ in the foreign market. (a)…Preview
  3. Q3What is Selling Cost ?Preview
  4. Q4State the features of duopoly.Preview
  5. Q5(a) Illustrate Price and Output determination under Monopoly. OR (b) Elucidate the Loanable Funds Theory of Interest.Preview
  6. Q6Which of the following is a feature of monopolistic competition ? (a) Product differentiation (b) One seller (c) No entry (d) Few sellersPreview
  7. Q7A market is : (a) Only a place where prices adjust (b) Only a place to buy things (c) A system where persons buy and sell goods directly or…Preview
  8. Q8Point out the essential features of Perfect Competition.Preview
  9. Q9(a) How price and output are determined under the perfect competition ? OR (b) Explain the public transport system in Tamil Nadu.Preview
  10. Q10The relationship between the price of a commodity and the supply of a commodity is : (a) Zero (b) Negative (c) Increases (d) PositivePreview
  11. Q11Equilibrium condition of a firm is : (a) MC<MR (b) MC=MR (c) MR=Price (d) MC>MRPreview
  12. Q12What are the reasons for upward sloping supply curve ?Preview
  13. Q13Differentiate between 'firm and industry'.Preview
  14. Q14(a) Explain the features of Perfect Competition. OR (b) Write a detailed note on the Gandhian economic ideas.Preview
  15. Q15In which market form, does absence of competition prevail ? (a) Duopoly (b) Perfect competition (c) Oligopoly (d) MonopolyPreview
  16. Q16Classify the market on the basis of Competition.Preview
  17. Q17Explain the meaning of Selling Cost with an example.Preview
  18. Q18What is Bilateral Monopoly ?Preview
  19. Q19(a) Describe the features of Oligopoly. OR (b) Discuss the Short-run cost curves with suitable diagram.Preview
  20. Q20Equilibrium condition of a firm is ______. (a) MC < MR (b) MC = MR (c) MR = Price (d) MC > MRPreview
  21. Q21Which of the following involves maximum exploitation of consumers ? (a) Monopolistic Competition (b) Perfect Competition (c) Oligopoly (d) M…Preview
  22. Q22What is Selling Cost ?Preview
  23. Q23In monopolistic competition, the essential feature is .... (a) Same product (b) selling cost (c) Single seller (d) Single buyerPreview
  24. Q24In which market form, does absence of competition prevail? (a) Perfect competition (b) Monopoly (c) Duopoly (d) OligopolyPreview
  25. Q25Define Dumping.Preview
  26. Q26Differentiate between 'firm' and 'industry'.Preview

More questions

+Show 4 questions4 questions
  1. Example 1A firm operating under perfect competition has the short-run total cost function $TC = Q^{2} + 5Q + 50$. The prevailing market price is Rs.…Free
  2. Example 2A perfectly competitive firm has $TFC = Rs.\,80$ and $TVC = Q^{2}+10Q$. If the market price falls to Rs. 12 per unit, should the firm contin…Free
  3. Example 3A monopolist faces the demand function $P=100-2Q$ and has the total cost function $TC=Q^{2}+10Q+50$. Find the profit-maximising output and p…Preview
  4. Example 4A monopolist selling in two separate markets, A and B, has a constant Marginal Cost of Rs. 10. The demand functions are $P_{A}=50-Q_{A}$ in…Preview