CA Foundation Exam > CA Foundation Questions > Which of the following is not a feature of pu...
Start Learning for Free
Which of the following is not a feature of pure competition?
- a)Presence of Government restrictions
- b)Homogeneous products
- c)Large number of buyers and sellers
- d)Free entry and exit of firms
Correct answer is option 'A'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
Which of the following is not a feature of pure competition?a)Presence...
Understanding Pure Competition
Pure competition is characterized by several key features that create a market environment where no single buyer or seller can influence the market price.
Key Features of Pure Competition:
- Homogeneous Products: All firms produce identical or very similar products, making it easy for consumers to switch between suppliers without loss of satisfaction.
- Large Number of Buyers and Sellers: The market consists of many buyers and sellers, ensuring that no single entity can control the market dynamics.
- Free Entry and Exit of Firms: Firms can enter or leave the market without significant barriers, promoting competition and innovation.
Why Presence of Government Restrictions is Not a Feature:
- Government Restrictions: The option "Presence of Government restrictions" is not a feature of pure competition. In a purely competitive market, government interventions are minimal.
- Market Freedom: Pure competition thrives on the principle of free market forces where prices are determined by supply and demand. Government restrictions can create barriers to entry or limit competition, which contradicts the essence of pure competition.
- Market Efficiency: The absence of government restrictions allows for efficient allocation of resources, leading to optimal production levels and prices that reflect true consumer preferences.
In conclusion, the correct answer is option 'A' because the presence of government restrictions disrupts the fundamental principles of pure competition, where market dynamics should ideally operate without interference.
Pure competition is characterized by several key features that create a market environment where no single buyer or seller can influence the market price.
Key Features of Pure Competition:
- Homogeneous Products: All firms produce identical or very similar products, making it easy for consumers to switch between suppliers without loss of satisfaction.
- Large Number of Buyers and Sellers: The market consists of many buyers and sellers, ensuring that no single entity can control the market dynamics.
- Free Entry and Exit of Firms: Firms can enter or leave the market without significant barriers, promoting competition and innovation.
Why Presence of Government Restrictions is Not a Feature:
- Government Restrictions: The option "Presence of Government restrictions" is not a feature of pure competition. In a purely competitive market, government interventions are minimal.
- Market Freedom: Pure competition thrives on the principle of free market forces where prices are determined by supply and demand. Government restrictions can create barriers to entry or limit competition, which contradicts the essence of pure competition.
- Market Efficiency: The absence of government restrictions allows for efficient allocation of resources, leading to optimal production levels and prices that reflect true consumer preferences.
In conclusion, the correct answer is option 'A' because the presence of government restrictions disrupts the fundamental principles of pure competition, where market dynamics should ideally operate without interference.
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
Which of the following is not a feature of pure competition?a)Presence of Government restrictionsb)Homogeneous productsc)Large number of buyers and sellersd)Free entry and exit of firmsCorrect answer is option 'A'. Can you explain this answer?
Question Description
Which of the following is not a feature of pure competition?a)Presence of Government restrictionsb)Homogeneous productsc)Large number of buyers and sellersd)Free entry and exit of firmsCorrect answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following is not a feature of pure competition?a)Presence of Government restrictionsb)Homogeneous productsc)Large number of buyers and sellersd)Free entry and exit of firmsCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following is not a feature of pure competition?a)Presence of Government restrictionsb)Homogeneous productsc)Large number of buyers and sellersd)Free entry and exit of firmsCorrect answer is option 'A'. Can you explain this answer?.
Which of the following is not a feature of pure competition?a)Presence of Government restrictionsb)Homogeneous productsc)Large number of buyers and sellersd)Free entry and exit of firmsCorrect answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following is not a feature of pure competition?a)Presence of Government restrictionsb)Homogeneous productsc)Large number of buyers and sellersd)Free entry and exit of firmsCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following is not a feature of pure competition?a)Presence of Government restrictionsb)Homogeneous productsc)Large number of buyers and sellersd)Free entry and exit of firmsCorrect answer is option 'A'. Can you explain this answer?.
Solutions for Which of the following is not a feature of pure competition?a)Presence of Government restrictionsb)Homogeneous productsc)Large number of buyers and sellersd)Free entry and exit of firmsCorrect answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of Which of the following is not a feature of pure competition?a)Presence of Government restrictionsb)Homogeneous productsc)Large number of buyers and sellersd)Free entry and exit of firmsCorrect answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Which of the following is not a feature of pure competition?a)Presence of Government restrictionsb)Homogeneous productsc)Large number of buyers and sellersd)Free entry and exit of firmsCorrect answer is option 'A'. Can you explain this answer?, a detailed solution for Which of the following is not a feature of pure competition?a)Presence of Government restrictionsb)Homogeneous productsc)Large number of buyers and sellersd)Free entry and exit of firmsCorrect answer is option 'A'. Can you explain this answer? has been provided alongside types of Which of the following is not a feature of pure competition?a)Presence of Government restrictionsb)Homogeneous productsc)Large number of buyers and sellersd)Free entry and exit of firmsCorrect answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Which of the following is not a feature of pure competition?a)Presence of Government restrictionsb)Homogeneous productsc)Large number of buyers and sellersd)Free entry and exit of firmsCorrect answer is option 'A'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup