State three features of monopolistic competition. - Vidyadip

Question

State three features of monopolistic competition.

✓

Answer

Three features of monopolistic competition are as follows:

Large Number of Buyers and Sellers As under perfect competition, in this form also, there are a large number of buyers and sellers. Also, the size of each firm is sniall. Each firm has a limited share of the market.
Product Differentiation It is a distinct feature of monopolistic competition. A product is often differentiated by way of trademarks and brand names. The differentiated products are close substitutes of each other, like colgate and closeup toothpaste. Because of product differentiation, each firm can decide its price policy independently, so that each firm has a partial control over price of its product.
Selling Cost Each firm has to incur selling costs (expenditure on advertisement, etc) to promote its sales. This is because there are a large number of close substitutes available in the market.

Need a full question paper?

Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.

Start Generating Free

Explore more

More "3 Marks Question" from Market Equilibrium→Market Equilibrium — all question types→Economics STD 12 Humanities & Commerce question papers→Rajasthan Board STD 12 Humanities & Commerce question papers→Rajasthan Board question paper generator→

Similar questions

Under perfect competition, firms can sell any quantity at the existing price, then why firms are reluctant to reduce the price in order to capture the entire market?

When price of a good falls from ₹ 20 to ₹ 10 per unit, producer reduces supply from 100 units to 50 units. Calculate price elasticity of supply.

Make a graphical representation of the following table -

(Units)	(Total Utility)	(Marginal Utility)
1	12	12
2	18	6
3	22	4
4	24	2
5	24	0
6	22	-2

Explain the effect of change in prices of related goods on demand of a given good.

How does change in price of a substitute good affect the demand of the given good? Explain with the help of an example.

At a price of 40 per unit, the quantity supplied of a commodity is 400 units. When its price falls by 10 percent, its quantity supplied falls by 36 units. Calculate its elasticity of supply. Is its supply elastic?

Calculate autonomous consumption expenditure from the following data about an economy which is in equilibrium.

National income= 1200

Marginal propensity to save= 0.20

Investment expenditure= 100

Explain any two objectives of a government budget.

Distinguish between stock and flow. Between net investment and capital which is a stock and which is a flow? Compare net investment and capital with flow of water into a tank.

The following table shows the total revenue and total costs of a competitive firm.
Calculate profit at each production level.

Production Level	Total Revenue	Total Cost	Profit
0	0	5
1	15	7
2	30	10
3	45	12
4	60	15
5	75	23