Consumer, Firms and Market

Assignment

Submitted By Submitted to
Yash Jhunjhunuwala Dr. Gajavelli V. S. sir
202022051
Section D
Q1
In Imperfectly Competitive situation the condition is as given beneath
P > MC = MR
The condition expresses that the cost charged in Imperfect situation is
consistently higher than the negligible expense and peripheral income.
P = MC = MR
The condition expresses that the cost charged in amazing situation is
consistently equivalent to the peripheral expense and minor income.
Presently, taking the instance of Imperfect situation individuals are continually
ready to address regardless of the interest and cost charged. For example
Cigarettes are intensely burdened each year in the financial plan yet interest
for them is continually rising and individuals are standing by to address
independent of the cost.
Though, in amazing rivalry we can't charge extravagantly high since excessive
costs can make individuals think for choices for the current item.
For example Presentation of GST demanded duty of 18% on FMCG item and
everybody organization in this area got hit one of them is Parle enterprises
they needed to go with cost cutting measure, for example, utilizing their
current staff and decrease in size of their items to keep up a similar cost for the
item and to keep up the piece of the overall industry.
This can make diverse market section, for example, Oligopolies and
Monopolies they have the ability to set any cost and charge it to and
individuals may have no different other options except for to buy the
equivalent.
The Microsoft items, for example, Windows, Office and so on are charge high
as no other direct contender to challenge them and this makes an imposing
business model for Microsoft and the charge incompletely for their items and
administrations.

Q2
In the event of short run:
At the point when TC > TR > TVC or TR = TVC
Henceforth, firms keep on delivering as they are capable either recoup VC or
they can compare the income with VC. Closing down creation will prompt zero
VC however fixed cost will at present be there. The income will be zero. It
keeps creating trusting the conditions will be ideal very soon.
Increment of Long runs
Powerful firms endure and wasteful ones leave the market
Firms which are essentially solid, have money stores to support the
misfortunes and sees future potential.
Firms will exist this would prompt less no. of provisions and subsequently
offering cost controlling ability to existing firms

Q3
A Monopoly pricing is scenario wherein a company is solely dominant in the
market and can charge as high as it wants to. The problem permits on either
side, let’s analyse them with examples as given.
CASE 1: A competitor is present.
A Competitor present in the same segment means availability of alternatives,
now either consumer can opt for it but may discontinue soon because of poor
quality, lack of latest technology used etc. may end up moving to market
monopoly and pay price charged.
E.g. Boeing and Airbus are the 2 only major Aircraft manufacturing company
but Boeing is highly preferred over Airbus due to technological superiority and
other qualities. This creates a monopoly for Boeing over Airbus because they
are preferred more and people are willing to buy them at charged price as they
Price givers not takers. But with this they may lose the market share to
competitors as people will turn to alternatives such as Airbus.
CASE 2: Government Intervention
When a Monopoly is in imperfect competition and alternatives are not strong
enough to pose a threat to Monopoly, governments intervene as offer subsidy
and provide other benefits to them. This turn the imperfect competition
towards perfect as this can pose serious threats to Monopoly.
E.g. Johnson and Johnson enjoyed market Monopoly for stents in US market as
no other players was present with market share close to 100 percent and all of
sudden in 3 years span with government interventions Boston labs gained
close 50% share of market and Johnson & Johnson had to cut price by 50% to
stay in market.
In Both the cases the companies having Monopoly in market could not charge
the price to enter Imperfect competition scenario.

Q4
An important market is characterized by both item and geographic variables.
When all is said in done terms, an applicable item market contains every one of
those items as well as administrations which are viewed as tradable or
substitutable (substitutability) by reason of item qualities, costs and proposed
use.
(a) Unbranded farm products – They are a part of a perfect competition.
There are many players present in the market and the market share is
evenly distributed among the competition
(b) Indian Railways & Google or Microsoft - They are a part of the
monopoly market as they don’t have competitor’s present in the
market. Their product have no close substitute in the market.
Eg Google enjoys a 98% share in the market.
(c) Detergents & Toothpaste - They are a part of the monopolistic
competition. The Products are differentiated from one another so they
are not perfect substitutes. Firms in these markets have high
Advertisement costs.
(d) Automobile & steel - They are a part of an oligopolistic market. There
are many players present in the market but the market share is
concentrated among 3-4 players.
Eg. Maruti (47%), Hyundai (17.3%), Mahindra (7.5) take up the major share.