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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?
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Most Upvoted Answer
Which one of the following statement is Incorrect?a)Competitive firms ...
Explanation:The incorrect statement is:D: Competitive firm always seeks to discriminate pricesHere's why the other statements are correct:A: Competitive firms are price takers and not price makers- In a perfectly competitive market, individual firms have no control over the market price.- They must accept the market price as given and adjust their output levels accordingly.B: Price discrimination is possible in monopoly only- Price discrimination occurs when a firm charges different prices to different consumers for the same good or service.- This is possible in a monopoly because the firm has market power and can control the price of the product.- In competitive markets, firms cannot practice price discrimination as they have no control over the market price.C: Duopoly may lead to monopoly- A duopoly is a market structure where there are only two firms dominating the market.- If one firm acquires the other or if the two firms collude to act as a single entity, the market structure can transition into a monopoly.
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Which one of the following statement is Incorrect?a)Competitive firms ...
Incorrect Statement: Competitive firm always seeks to discriminate prices.
Explanation:
Competitive firms are those firms that operate in a market where there are many buyers and sellers. In such a market, firms are price takers and not price makers. This means that they have to accept the prevailing market price for their products or services. They cannot influence the market price by changing their own prices.
Price discrimination is possible in monopoly only. In a monopoly market, there is only one seller of a product or service. Hence, the seller has the power to charge different prices from different buyers.
Duopoly is a market structure in which there are only two firms that dominate the market. Duopoly may lead to monopoly if one of the firms gains a significant advantage over the other.
However, the statement that "competitive firm always seeks to discriminate prices" is incorrect. This is because price discrimination is a strategy that is used by firms to maximize their profits. But in a competitive market, firms cannot discriminate prices as they are price takers. They have to accept the market price for their products or services.
Therefore, the correct option is (d) Competitive firm always seeks to discriminate prices.
Explanation:
Competitive firms are those firms that operate in a market where there are many buyers and sellers. In such a market, firms are price takers and not price makers. This means that they have to accept the prevailing market price for their products or services. They cannot influence the market price by changing their own prices.
Price discrimination is possible in monopoly only. In a monopoly market, there is only one seller of a product or service. Hence, the seller has the power to charge different prices from different buyers.
Duopoly is a market structure in which there are only two firms that dominate the market. Duopoly may lead to monopoly if one of the firms gains a significant advantage over the other.
However, the statement that "competitive firm always seeks to discriminate prices" is incorrect. This is because price discrimination is a strategy that is used by firms to maximize their profits. But in a competitive market, firms cannot discriminate prices as they are price takers. They have to accept the market price for their products or services.
Therefore, the correct option is (d) Competitive firm always seeks to discriminate prices.
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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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