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Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:
Assertion (A): There is no restriction on the entry and exit of the firms in the perfect competitive market.
Reason (R): The perfect competition market is characterised by the sellers being a price taker and not a price maker.
- a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).
- b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the 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 'B'. Can you explain this answer?
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Direction: In the following questions, a statement of Assertion (A) i...
Firms are said to be in perfect competition when the following conditions occur: Many firms produce identical products. Firms can enter and leave the market without any restrictions. In other words, there is free entry and exit into and out of the market.
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Direction: In the following questions, a statement of Assertion (A) i...
Assertion (A): There is no restriction on the entry and exit of the firms in the perfect competitive market.
Reason (R): The perfect competition market is characterized by the sellers being a price taker and not a price maker.
The correct answer is option 'B' - Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).
Explanation:
Perfect competition is a market structure where there are many buyers and sellers, and no individual firm has control over the market price. In this type of market, there are no restrictions on the entry and exit of firms. Let's examine each statement in detail:
Assertion (A): There is no restriction on the entry and exit of the firms in the perfect competitive market.
In a perfectly competitive market, new firms are free to enter the market if they believe they can earn profits. Similarly, existing firms are free to exit the market if they are incurring losses. There are no legal or regulatory barriers that prevent firms from entering or exiting the market. This is because perfect competition promotes competition and allows for efficient allocation of resources.
Reason (R): The perfect competition market is characterized by the sellers being a price taker and not a price maker.
In a perfectly competitive market, each firm is a price taker, meaning they have no control over the market price. The market price is determined by the overall supply and demand in the market. Individual firms have to accept the prevailing market price and adjust their quantity of production accordingly. They cannot influence the market price by changing their output. This is because there are many buyers and sellers in the market, and no individual firm has enough market power to affect the market price.
Explanation of the Correct Answer:
Both Assertion (A) and Reason (R) are true. In a perfectly competitive market, there are no restrictions on the entry and exit of firms, and sellers are price takers. However, Reason (R) does not provide a direct explanation for Assertion (A). The fact that sellers are price takers does not necessarily imply that there are no restrictions on entry and exit. Therefore, option 'B' is the correct answer.
Reason (R): The perfect competition market is characterized by the sellers being a price taker and not a price maker.
The correct answer is option 'B' - Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).
Explanation:
Perfect competition is a market structure where there are many buyers and sellers, and no individual firm has control over the market price. In this type of market, there are no restrictions on the entry and exit of firms. Let's examine each statement in detail:
Assertion (A): There is no restriction on the entry and exit of the firms in the perfect competitive market.
In a perfectly competitive market, new firms are free to enter the market if they believe they can earn profits. Similarly, existing firms are free to exit the market if they are incurring losses. There are no legal or regulatory barriers that prevent firms from entering or exiting the market. This is because perfect competition promotes competition and allows for efficient allocation of resources.
Reason (R): The perfect competition market is characterized by the sellers being a price taker and not a price maker.
In a perfectly competitive market, each firm is a price taker, meaning they have no control over the market price. The market price is determined by the overall supply and demand in the market. Individual firms have to accept the prevailing market price and adjust their quantity of production accordingly. They cannot influence the market price by changing their output. This is because there are many buyers and sellers in the market, and no individual firm has enough market power to affect the market price.
Explanation of the Correct Answer:
Both Assertion (A) and Reason (R) are true. In a perfectly competitive market, there are no restrictions on the entry and exit of firms, and sellers are price takers. However, Reason (R) does not provide a direct explanation for Assertion (A). The fact that sellers are price takers does not necessarily imply that there are no restrictions on entry and exit. Therefore, option 'B' is the correct answer.
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Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): There is no restriction on the entry and exit of the firms in the perfect competitive market.Reason (R): The perfect competition market is characterised by the sellers being a price taker and not a price maker.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the 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 'B'. Can you explain this answer?
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Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): There is no restriction on the entry and exit of the firms in the perfect competitive market.Reason (R): The perfect competition market is characterised by the sellers being a price taker and not a price maker.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the 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 'B'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): There is no restriction on the entry and exit of the firms in the perfect competitive market.Reason (R): The perfect competition market is characterised by the sellers being a price taker and not a price maker.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the 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 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): There is no restriction on the entry and exit of the firms in the perfect competitive market.Reason (R): The perfect competition market is characterised by the sellers being a price taker and not a price maker.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the 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 'B'. Can you explain this answer?.
Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): There is no restriction on the entry and exit of the firms in the perfect competitive market.Reason (R): The perfect competition market is characterised by the sellers being a price taker and not a price maker.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the 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 'B'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): There is no restriction on the entry and exit of the firms in the perfect competitive market.Reason (R): The perfect competition market is characterised by the sellers being a price taker and not a price maker.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the 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 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): There is no restriction on the entry and exit of the firms in the perfect competitive market.Reason (R): The perfect competition market is characterised by the sellers being a price taker and not a price maker.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the 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 'B'. Can you explain this answer?.
Solutions for Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): There is no restriction on the entry and exit of the firms in the perfect competitive market.Reason (R): The perfect competition market is characterised by the sellers being a price taker and not a price maker.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the 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 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
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Here you can find the meaning of Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): There is no restriction on the entry and exit of the firms in the perfect competitive market.Reason (R): The perfect competition market is characterised by the sellers being a price taker and not a price maker.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the 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 'B'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
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