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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:
Assertion (A): The determination of price in a Perfect competition market is a study of microeconomics.
Reason (R): Determination of a price only affects the individual market and not the economy as a whole.
  • a)
    Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
  • b)
    Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
  • c)
    Assertion (A) is true, but Reason (R) is false .
  • d)
    Assertion (A) is false, but Reason (R) is true.
Correct answer is option 'A'. Can you explain this answer?
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Directions : In the following questions, a statement of Assertion (A)...
In economic theory, perfect competition occurs when all companies sell identical products, market share does not influence price, companies are able to enter or exit without barrier, buyers have “perfect” or full information, and companies cannot determine prices. In other words, it is a market that is entirely influenced by market forces. It is the opposite of imperfect competition, which is a more accurate reflection of a current market structure.
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Directions : In the following questions, a statement of Assertion (A)...
Assertion (A): The determination of price in a Perfect competition market is a study of microeconomics.
Reason (R): Determination of a price only affects the individual market and not the economy as a whole.

The correct answer is option 'A': Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).

Explanation:

In order to understand why the correct answer is option 'A', we need to analyze the statements of Assertion (A) and Reason (R) individually.

Assertion (A): The determination of price in a Perfect competition market is a study of microeconomics.

- This statement is true. In microeconomics, the determination of price in a perfect competition market is one of the key topics of study. Perfect competition is a market structure where there are many buyers and sellers, homogeneous products, perfect information, and no barriers to entry or exit. In such a market, the price is determined by the interaction of demand and supply forces.

Reason (R): Determination of a price only affects the individual market and not the economy as a whole.

- This statement is also true. In a perfect competition market, the determination of price only affects the individual market and not the entire economy. This is because in a perfect competition market, there are many small firms operating independently, and each firm is a price taker. This means that each firm has no control over the market price and can only adjust its quantity supplied based on the prevailing market price. Therefore, the determination of price in a perfect competition market does not have a significant impact on the overall economy.

Explanation of the Reason:

The reason provided in Reason (R) correctly explains Assertion (A). In a perfect competition market, the determination of price is a study of microeconomics because it focuses on the individual market and the interaction between demand and supply forces within that market. The price in a perfect competition market is determined by the equilibrium point where the quantity demanded equals the quantity supplied. Since each firm in a perfect competition market is a price taker, the determination of price only affects the individual market and does not have a significant impact on the economy as a whole.

Therefore, the correct answer is option 'A': Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The determination of price in a Perfect competition market is a study of microeconomics.Reason (R): Determination of a price only affects the individual market and not the economy as a whole.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?
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