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In which of the following types of market structures, are resources, assumed to be mobile?
  • a)
    Oligopoly
  • b)
    Perfect competition
  • c)
    Monopolistic competition
  • d)
    Monopoly
Correct answer is option 'B'. Can you explain this answer?
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In which of the following types of market structures, are resources, a...
Pure or perfect competition is a theoretical market structure in which the following criteria are met:
1. All firms sell an identical product (the product is a "commodity" or "homogeneous").
2. All firms are price takers (they cannot influence the market price of their product).
3. Market share has no influence on prices.
4. Buyers have complete or "perfect" information—in the past, present and future—about the product being sold and the prices charged by each firm.
5. Resources for such a labor are perfectly mobile.
6. Firms can enter or exit the market without cost.
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In which of the following types of market structures, are resources, a...
Mobile Resources in Perfect Competition

In perfect competition, resources are assumed to be mobile. This means that resources such as labor, capital, and raw materials can move freely between different firms and industries.

Perfect competition is a market structure where there are many small firms that sell similar products. The market is characterized by ease of entry and exit, perfect information, and homogeneous products. In such a market, firms compete solely on the basis of price, and no single firm has any market power.

Mobile resources are essential in perfect competition because they ensure that resources are allocated efficiently. In a market with mobile resources, firms that are inefficient and unable to compete will exit the market, and their resources will be reallocated to more efficient firms. This ensures that resources are always used in the most productive way, and that there is no waste.

In a market without mobile resources, inefficient firms may continue to operate, even if they are not producing goods or services that are in demand. This can lead to a misallocation of resources and a reduction in overall economic welfare.

Overall, the assumption of mobile resources is a key feature of perfect competition, and it plays an important role in ensuring that resources are allocated efficiently and that economic welfare is maximized.
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In which of the following types of market structures, are resources, a...
In perfect competition factors are assumed to be perfectly mobile as perfect knowledge prevails in the market and products are homogenous as well as uniform prices.
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Direction: Read the following passage and answer the questions that follows:Market structure is best defined as the organisational and other characteristics of a market. We focus on those characteristics which affect the nature of competition and pricing – but it is important not to place too much emphasis simply on the market share of the existing firms in an industry.Key Summary on Market StructuresTraditionally, the most important features of market structure are: The number of firms (including the scale and extent of foreign competition) The market share of the largest firms (measured by the concentration ratio) The nature of costs (including the potential for firms to exploit economies of scale and also the presence of sunk costs which affects market contestability in the long term) The degree to which the industry is vertically integrated-vertical integration explains the process by which different stages in production and distribution of a product are under the ownership and control of a single enterprise. A good example of vertical integration is the oil industry, where the major oil companies own the rights to extract from oil fields, they run a fleet of tankers, operate refineries and have control of sales at their own filling stations. The extent of product differentiation (which affects cross-price elasticity of deman d) The structure of buyers in the industry (including the possibility of monopsony power) The turnover of customers (sometimes known as "market churn") i.e. how many customers are prepared to switch their supplier over a given time period when market conditions change. The rate of customer churn is affected by the degree of consumer or brand loyalty and the influence of persuasive advertising and marketing. Q. In which market, there is the highest market churn?

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In which of the following types of market structures, are resources, assumed to be mobile?a)Oligopolyb)Perfect competitionc)Monopolistic competitiond)MonopolyCorrect answer is option 'B'. Can you explain this answer?
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