Discuss the importance of the following factors in determing the nature of the market you have studied: (a) Number of firms, Selling costs, (c ) Price Discrimination, (d) Interdependence of firms.

Discuss the importance of the following factors in determing the natur

1.	Discuss the importance of the following factors in determing the nature of the market you have studied: (a) Number of firms, Selling costs, (c ) Price Discrimination, (d) Interdependence of firms.
Answer» (a) When the number of firms is very large, it is a case of perfect competition. When the number of firms is no as large as under perfect competition, the situation is that of monopolistic competition. When there are only a few firms in the market, it is a case of oligopoly. When there is only one firm in the market,it is a case of monopoly (b) Heavy selling cost arise under oligopoly and monopolistic competion. Under monopoly low selling costs are incuried for informative purposes only and there is no selling cost are incurred for information purpose only by and there is no selling cost under perfect competition, (c ) Price discrimination is possible only under monopoly (d) The interdependence of firms is a characteristic which beiangs to oligopoly