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 Which one of the following statement is Incorrect?
  • a)
    Competitive firms are price takers and not price makers
  • b)
    Price discrimination is possible in monopoly only
  • c)
    Duopoly may lead to monopoly
  • d)
    Competitive firm always seeks to discriminate prices
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Which one of the following statement is Incorrect?a)Competitive firms ...
Explanation:

The correct answer is option 'D': Competitive firms always seek to discriminate prices.

Competitive firms and price discrimination:
- Competitive firms are price takers, which means they have no control over the market price. They have to accept the prevailing market price and adjust their output accordingly.
- Price discrimination refers to the practice of charging different prices to different customers for the same product or service.
- Price discrimination is not possible for competitive firms because they cannot influence the market price. They have to sell their products at the prevailing market price to all customers.

Monopoly and price discrimination:
- Monopoly refers to a market structure where there is only one seller of a particular product or service.
- In a monopoly, the seller has the power to set the price because there are no close substitutes available in the market.
- Price discrimination is possible in a monopoly because the seller can charge different prices to different customers based on their willingness to pay.
- Monopolists can engage in price discrimination by segmenting the market based on factors such as location, age, income, or willingness to pay.

Duopoly and monopoly:
- Duopoly refers to a market structure where there are only two sellers of a particular product or service.
- While duopoly can lead to increased competition and better outcomes for consumers, it does not necessarily lead to a monopoly.
- In a duopoly, the two sellers can compete with each other by offering different prices, products, or services to attract customers.
- However, if one of the sellers gains a significant advantage over the other and captures a dominant market share, it may lead to a monopoly.

Conclusion:
- The statement that is incorrect is option 'D': Competitive firms always seek to discriminate prices.
- Competitive firms are price takers and do not have the power to set prices or engage in price discrimination.
- Price discrimination is possible in a monopoly, not in a competitive market.
- Duopoly may or may not lead to a monopoly, depending on the market dynamics and the actions of the sellers involved.
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Community Answer
Which one of the following statement is Incorrect?a)Competitive firms ...
D- Do not opt to discriminate instead there is uniform price in PC
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Which one of the following statement is Incorrect?a)Competitive firms are price takers and not price makersb)Price discrimination is possible in monopoly onlyc)Duopoly may lead to monopolyd)Competitive firm always seeks to discriminate pricesCorrect answer is option 'D'. Can you explain this answer?
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