Economics · Class 11 Commerce
Ch 6Non-Competitive Markets — Class 11 Economics, concept-first.
Earlier chapters of the NCERT Class 12 Introductory Microeconomics course studied perfect competition — a market structure in which both consumers and firms are price takers.
Key concepts
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In previous exams
How often this chapter’s concepts have been examined — real appearance data, never estimated.
Chapter contents
The NCERT structure, section by section. Open a section to see its questions, then read the concept-first solution.
Introduction
Earlier chapters of the NCERT Class 12 Introductory Microeconomics course studied perfect competition — a market structure in which both consumers and firms are price takers.
Simple Monopoly in the Commodity Market
A market structure in which there is a single seller is called a monopoly. This one-line definition hides several conditions that must be stated explicitly. A monopoly market structure requires that:
Market Demand Curve is the Average Revenue Curve
The market demand curve shows the quantities that consumers as a whole are willing to buy at different prices.
Total, Average and Marginal Revenues
A closer look at Table 6.1 shows that does not rise by the same amount for every extra unit. The first unit raises from 0 to Rs 9.50 (a rise of Rs 9.50); the 5th unit raises it by only Rs 5.50 (Rs 37.…
Marginal Revenue and Price Elasticity of Demand
Marginal revenue is also linked to the price elasticity of demand. The full derivation is not needed here; it is enough to notice one fact — price elasticity of demand is greater than 1 when is positi…
Short Run Equilibrium of the Monopoly Firm
As with perfect competition, we treat the monopoly firm as a profit maximiser, and we assume it keeps no stocks — the whole output produced is put up for sale.
Other Non-Perfectly Competitive Markets
Monopoly is the most extreme departure from perfect competition, but it is not the only one. When the assumption of a homogeneous product is dropped, or when there are a few firms rather than one, we…
Monopolistic Competition
Monopolistic competition is a market structure in which the number of firms is large and there is free entry and exit, but the goods produced are not homogeneous. This structure is very common.
How do Firms behave in Oligopoly?
If a commodity is sold by more than one firm but the number of sellers is few, the structure is an oligopoly. The special case of exactly two sellers is a duopoly.
Key Concepts
The three market structures introduced in this chapter are the key concepts to remember for CBSE Class 12 microeconomics revision:
Summary
- The market structure called monopoly exists where there is exactly one seller in a market. - A commodity market has a monopoly structure if there is one seller, the commodity has no substitute, and…
Exercises
+−Show 13 questionsHide questions13 questions
- Q1What would be the shape of the demand curve so that the total revenue curve is (a) a positively sloped straight line passing through the ori…Free
- Q2From the schedule provided below calculate the total revenue, demand curve and the price elasticity of demand: | Quantity | 1 | 2 | 3 | 4 |…Free
- Q3What is the value of the MR when the demand curve is elastic?Free
- Q4A 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…Preview
- Q5If the monopolist firm of Exercise 3, was a public sector firm. The government set a rule for its manager to accept the goverment fixed pric…Preview
- Q6Comment on the shape of the MR curve in case the TR curve is a (i) positively sloped straight line, (ii) horizontal straight line.Preview
- Q7The market demand curve for a commodity and the total cost for a monopoly firm producing the commodity is given by the schedules below. Use…Preview
- Q8Will the monopolist firm continue to produce in the short run if a loss is incurred at the best short run level of output?Preview
- Q9Explain why the demand curve facing a firm under monopolistic competition is negatively sloped.Preview
- Q10What is the reason for the long run equilibrium of a firm in monopolistic competition to be associated with zero profit?Preview
- Q11List the three different ways in which oligopoly firms may behave.Preview
- Q12If duopoly behaviour is one that is described by Cournot, the market demand curve is given by the equation q = 200 – 4p, and both the firms…Preview
- Q13What is meant by prices being rigid? How can oligopoly behaviour lead to such an outcome?Preview
Sample & Board Papers
Sample papers and previous-year board questions for this subject.