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Fixed cost does not influence marginal cost because this cost does not change with the change in volume of output. Whether the output is zero or maximum, fixed costs remain the same.

Difference between total cost and variable cost is uniform and it is equivalent to fixed cost. That is why the distance between total cost curve and variable cost curve is uniform throughout their length. Therefore, TC and VC curves are parallel to each other.

(b) Wages paid to the factory labour

(b) Average total cost

(d) Implicit Costs

LAC curve is a ‘U’ shape curve. This shape of LAC depends upon the returns to the scale. Returns to scale may be increasing, constant or decreasing. We can express it as follows:

The traditional shape of LAC is ‘U’ shaped but in modem technology, the LAC will be ‘L’ shaped because after getting economies of scale, a firm will always try to minimize the cost and in this way curve will be perfectly flat.

Total fixed cost curve is parallel to X-axis because it signifies that the cost will remain fixed whatever be the volume of output.

Variable Cost.

According to Leftwitch, “Implicit costs are costs of self-owned and self-employed resources.”

The cost of self-owned factors which are employed by the entrepreneur in his own business is called implicit cost.

No, as the electrons are very small, light of very short wavelength is required for this task.

This short wavelength light interacts with the electron and disturbs the motion of electron. So it is not possible to find exact position and velocity of electron simultaneously. Whereas we can find the region where the probability of finding electron is more.

It is very close to light.

In the diagram, equilibrium price is ₹ 30/- because at this point dd curve insects SS curve at point 'P'. At this point DD is 300 doz of bananas and sellers are ready to sell 300 doz at price ₹ 3.

The term Oligopoly is derived from the Greek words 'Oligo' which means few and 'Poly' which means sellers. Hence, following are its features –

1. Many buyers and few sellers : There are many buyers and a few sellers or firms (may be five or six) who dominate the market and have major control over the price of a product.

2. Interdependence : Since the number of firms are less, any change in price, output, product etc. by one firm will affect the rival firms and will force them to change their price, output, etc. E.g. In case of Coke and Pepsi in soft drink market.

3. Selling cost or advertising : Each firm in order to sell more of its product takes aggressive steps to advertise or through free samples. This helps them to capture larger sales.

4. Barrier to entry : The firm can easily exit from the industry whenever it wants, but to enter a new industry it has certain entry barriers like government license, patent right, etc.

5. Uncertainty : There is a great uncertainty in this market if the rival firms join hands and may try to fight each other.

6. Lack of Uniformity : The firms may produce either homogeneous or differentiated products. Eg. In automobile industry, Maruti, Indica are examples of differentiated product but cooking gas of Bharat Petroleum and Hindustan Petroleum are examples of homogeneous product or pure oligopoly.

There are different types of monopoly as analysed below :

(1) Natural Monopoly : A natural monopoly arises when a particular type of natural resource is located in a particular region like petrol or crude oil in Gulf countries. Also natural advantages such as good location, business reputation, age – old establishment s etc., confer natural monopoly. Similarly, many professional skills, natural talents give monopoly power. E.g. A singer or actor has monopoly of his skill, talent.

(2) Legal Monopoly : Legal monopolies are those monopolies which are recognised by law. Legal protection granted by the Government in the form of trade mark, copy rights, license etc., give monopoly power to j the firms. Here the potential competitors are j not allowed to copy the product registered under the given brand names, patents or trade marks according to the law.

(3) Joint Monopoly or Voluntary Monopoly : This monopoly arises through mutual agreement and business combinations like the formation of cartels, syndicate, trust etc. For e.g. Oil producing nations have come together and formed a Cartel OPEC Organisation of Petroleum Exporting Countries.

(4) Simple Monopoly : A simple monopoly firm charges a uniform price for its product to all the buyers.

(5) Discriminating Monopoly : A discriminating monopoly firm charges different prices for the same product to ) different buyers. E.g. a doctor, a teacher, a lawyer, etc., charges different fees from the people. The practice of charging different j prices from different buyers is called"Price discrimination".

(6) Private Monopoly : When an individual or a private firm enjoys the monopoly of manufacturing and supplying a particular product, it is called private monopoly. The main aim of private monopolist is profit maximisation.

(7) Public Monopoly : When a field of production is solely owned, controlled and operated by the government, it is regarded as public monopoly. Eg. Public utility service like Railways, Electricity, Water Supply etc. Since these monopolies are service motivated and welfare oriented they are also called welfare monopolies.

There are different types of monopoly as analysed below:

1. Natural Monopoly : A natural monopoly arises when a particular type of natural resource is located in a particular region like petrol or crude oil in Gulf countries. Also natural advantages such as good location, business reputation, age – old establishment s etc., confer natural monopoly. Similarly, many professional skills, natural talents give monopoly power. E.g. A singer or actor has monopoly of his skill, talent.

2. Legal Monopoly : Legal monopolies are those monopolies which are recognised by law. Legal protection granted by the Government in the form of trade mark, copy rights, license etc., give monopoly power to the firms. Here the potential competitors are not allowed to copy the product registered under the given brand names, patents or trade marks according to the law.

3. Joint Monopoly or Voluntary Monopoly : This monopoly arises through mutual agreement and business combinations like the formation of cartels, syndicate, trust etc. For e.g. Oil producing nations have come together and formed a Cartel OPEC (Organisation of Petroleum Exporting Countries).

4. Simple Monopoly : A simple monopoly firm charges a uniform price for its product to all the buyers.

5. Discriminating Monopoly : A discriminating monopoly firm charges different prices for the same product to different buyers. E.g. a doctor, a teacher, a lawyer, etc., charges different fees from the people. The practice of charging different prices from different buyers is called “Price discrimination.”

6. Private Monopoly : When an individual or a private firm enjoys the monopoly of manufacturing and supplying a particular product, it is called private monopoly. The main aim of private monopolist is profit maximisation.

7. Public Monopoly : When a field of production is solely owned, controlled and operated by the government, it is regarded as public monopoly. Eg. Public utility service like Railways, Electricity, Water Supply etc. Since these monopolies are service motivated and welfare oriented they are also called welfare monopolies.

Features of Monopoly:

1. Single Seller and Many Buyers : In Monopoly market, there is only one seller or producer and many buyers. Monopoly firm does not have a rival in the market. So there is no competition. 

2. No Close Substitute : The commodity produced by the monopolist does not have close substitutes. Hence they do not face any competition. 

3. Entry Barriers : The fact that there is only one firm under monopoly means that other firms are restricted from entering the market.

The entry barriers may be natural, legal or financial in nature.

4. Firm Coincides with Industry : In monopoly market, the firm and industry are one and the same. In other words, there is no distinction between firm and industry. 

5. Price Maker : In monopoly the seller is a Trice Maker’. Since the monopolist has control over the supply he can determine the price of his product. 

6. Profit Maximisation (super normal profit) : A monopolist earns super normal profit. His decision regarding the price and the level of output are guided by profit maximisation motive.

7. Control Over Supply : The monopolisthas a complete hold over market supply as he is the sole producer.

Price discrimination : This implies charging different prices for the same l product to different buyers.

(1)-(c), (2)-(b), (3)-(d), (4)-(a).

On the basis of time market can be classified into following four types:

1. Very short period market: A very short period market is one during which supply of a commodity is fixed as it is already produced. This market is for a few days or maximum a week. So the price of the product is determined by demand. Eg. During festival time supply of fruits can be increased, so price rises.

2. Short period market : A short period market is said be a market upto one year. In this market supply of goods can be increased by increasing the variable factors like labour and raw material with the given fixed factors like machinery.

3. Long period market : A long period market is a market upto five years. In this J supply of a commodity can fully increased on demand as all factors of production can j be changed.

4. Very long period market : A very long period market is for more than five years. In this period there can be full adjustment of supply to demand.

Natural Monopoly:

1. The monopoly power is acquired by a firm due to natural advantages such as good location, control over scarce resources, natural skill, talent, etc. 

2. Natural monopoly is determined by the availability of natural resources or natural talents and skills. 

3. Normally the monopolist would charge higher prices for the goods. 

4. Main objective is to maximise profit. 

5. Gulf countries monopolies in production of oil. India’s monopoly in production of jute and cotton. Lata Mangeshkar monopolised as a professional singer once upon a time.

Social Monopoly / Public Monopoly:

1. When government nationalises an industry and acquires complete control over its market that monopoly is called as social monopoly.

2. Social monopoly is determined by economic aims and objectives of the government. 

3. Government may not charge higher prices keeping in mind the welfare aspect. 

4. The main objective is to provide social welfare. 

5. Public utility services like water supply, railway services etc., are examples of public monopoly.

Monopoly:

1. Monopoly is a market structure in which there is a single seller of a product which has no close substitute. 

2. There is no competition. 

3. There are strong barriers to entry. 

4. The demand for the product is less elastic as there are no close substitute. 

5. There is no selling cost incurred. 

6. Firm and industry are identical. 

7. Pure monopoly is an inelastic market.

Monopolistic Competition:

1. It is a market structure in which large number of firms produce and sell products that are differentiated but close substitutes. 

2. There is competition among the firms producing very close substitutes. 

3. There is free entry and exit for the firms. 

4. Demand of the product is elastic as there are close substitutes for the product. 

5. Selling cost has an important role in Monopolistic Market. 

6. Under monopolistic competition firm and industry are not identical. They are a group. 

7. It is a realistic market.

On the basis of place, market can be classified as follows :

1. Local Market : When the goods are produced and sold in the local area mainly due to the high transport cost are called local markets. 

For example bricks, stone, etc. Also perishable goods like fish, milk, etc. have local market.

2. National Market : Market confined to a domestic market in a country is called national market. E.g. cars, scooters, TV sets. These goods can be easily transported within the country.

3. International Market : Goods which can be sold in any part of the world have international market. E.g. Tea, cotton, petroleum. Such goods can be exported and imported at a low transport cost.

wrong pair: 1. Public Monopoly - Wheat from Punjab

On the basis of competition, market can be classified into two main types :

1. Perfect competition 

2. Imperfect competition : 

It is further classified into. 

(A) Monopoly 

(B) Oligopoly 

(C) Monopolistic Competition

According to Mrs. Joan Robinson, “Perfect competition prevails when the demand for the output of each producer is perfectly elastic. ” Hence, it is a market where there are large number of buyers and sellers engaged in buying and selling a homogeneous product at a single price in the market. 

Imperfect competition:

(A) Monopoly: According to E. H. Chamberlin, “A monopoly refers to a single firm which has control over the supply of a product which has no close substitutes.” Hence, he can charge different prices from different buyers on the basis of demand.

(B) Oligopoly : An oligopoly is a market situation in which there are few sellers and a large number of buyers. Sellers may sell similar or different products which are close substitutes of each other.

(C) Monopolistic Competition : According to E. H. Chamberlin, “Monopolistic competition refers to competition among a large number of sellers producing close but not perfect substitutes.” Hence, this is a market which has features of both monopoly and perfect competition. E.g. for soaps, washing powders, etc.

(a) Gross indirect tax – subsidy

wrong pair: 2. Market on the basis of competition - Perfect competition, International

Short Period:

1. A short period is one during which the stock of a commodity can be changed to some extent. 

2. This is done by changing the quantity of variable factors like labour and raw material. 

3. Supply can be slightly adjusted to the change in demand. 

4. Demand plays more important role in determining the price. 

5. This period is usually upto 8-10 months.

Long Period:

1. A long period is one during which the stock of a commodity can be fully changed. 

2. This is done by changing the size of the plant because all factors are variable.

3. Supply can be fully adjusted to the change in demand. 

4. Supply plays more important role in determining the price. 

5. This period is usually form 1 year to 4-5 years.

Concept : Price Maker (Feature of Monopoly).

Explanation : A monopolist is a single seller in the market for his product and has control over the supply and can determine the price for his product.

There are no close substitutes available for his product in the market. So, he is a price maker.

No, I do not agree with the statement.

• Value-in-use refers to the usefulness of a commodity. Air, Water, Sunshine, etc. have high value in use.
• They are basically free goods. 
• Value in exchange means the value of a commodity expressed in money that is the price of a commodity. 
• E.g. Car, T.V., computers, etc., have value-in-exchange as they command a price. They are called economic goods. Thus, value in use and value in exchange is not the same. terms of

Monopoly is an extreme form of market structure. There is a single producer and seller of a product which has no close substitutes in the market.

Perfect Competition: 

1. It is a market situation in which there are large number of buyers and large number of sellers selling homogeneous product. 

2. Products are perfect substitute for another as they are identical. 

3. Uniform price prevails in the whole market. There is no selling cost.

4. Firms are price takers. Thus the firm has a horizontal demand curve. 

5. It is an unrealistic market.

Monopolistic Competition:

1. It is a market situation in which there are many buyers and many sellers selling differentiated products. 

2. Products are similar but not identical. They are close substitutes. 

3. Individual price policy is followed and huge selling cost is incurred on sales promotions. 

4. The firms are price makers. Thus the firms have a downward sloping demand curve. 

5. It is a realistic market.

Local Market:

1. Local market is one in which goods are produced and sold mostly in local areas. 

2. Generally, perishable goods like milk, vegetables and bulky goods like sand have local market. 

3. Demand is limited in local market. 

4. Less variety is available in this market.

National Market:

1. National Market is a domestic market in which goods are produced and sold within the country. 

2. Generally goods demanded by common man like wheat, rice, soaps have national market. 

3. Demand is very high in national market. 

4. Huge variety is available in this market.

Yes, I agree with the statement. 

• In the economic sense want means a feeling of ‘lack of satisfaction,
• This feeling enables the person to satisfy his want.
• Human wants to differ with seasons. 
• E.g. a person requires woolen clothes in winter and an umbrella in the rainy season.
• Wants also differ from preferences, i.e. they are influenced by individual habits and tastes.

(b) The firm is a price taker.

In the ordinary sense, the word, ‘want,’ and ‘need’ are considered as same. But, in economics, a need is something that is necessary for survival whereas, want is the expression of lack of satisfaction. It enables the person to satisfy his want.

Characteristics of wants are as follows: 

• Wants are unlimited: Wants are multiple. They are never-ending. They arise again and again. When one want is satisfied another arises. Wants go on increasing.
• Wants are recurring in nature: Some of the humans want to occur again and again. They arise even if it is satisfied once. E.g. We take food after a certain time interval to satisfy hunger. 
• Wants are complementary: Some wants are complementary to each other. Sometimes, two or more goods are required to satisfy single want. E.g. the want for mobile can be satisfied only when we fulfill the want of a sim card. 
• Wants to differ with gender: Wants of men and women are different, as per their needs. E.g. a lady may take Saree while a gentleman wants a Shirt and Tie.
• Wants to differ with age: Human wants to go on changing as age differs. E.g. a baby wants a doll whereas a student wants a book, etc.
• Wants are competitive: We cannot satisfy all our wants at a time because means are limited. So there is competition among wants. That want is preferred first which is most urgent. 
• Wants are alternative: Some wants are alternative. E.g. having tea or coffee, using an umbrella or raincoat, etc. 
• Wants to differ with culture: Human wants to vary with culture. E.g. an American wants a coat and hat while an Indian wants a kurta. 
• Wants to differ with climate:
• Wants to go on changing with the season. E.g. a person who wants woolen clothes in winter and Ice-cream in summer. 
• Wants to differ with preferences: Human wants to differ according to tastes and preferences. Wants are also influenced by the habits of the people. E.g. Person ‘A’ has a preference for books, while Person ‘B’ has a preference for clothes.

Following are the two features of monopoly:

1. Single Seller Under monopoly, there should be a single producer of the commodity.
2. No Substitute of the Commodity All the units of a commodity are identical and there are no close substitutes of that commodity.

Perfect Competition: 

1. Perfect competition is a type of market where there are large number of firms producing homogeneous product. 

2. Each seller is price taker. 

3. Each individual firm controls only a small portion of the total supply. 

4. Each seller and buyer has perfect knowledge about the market situation.

5. There are no types in perfect competitive market.

Imperfect Competition:

1. Imperfect competition is a type of market where the product produced by the sellers may be similar or differentiated. 

2. Each seller is price maker. 

3. Each seller may control more or less portion of the total supply. 

4. Each seller and buyer may not have perfect knowledge about the market situation.

5. Examples of imperfect market are monopoly, oligopoly, monopolistic competition, etc.

No, I do not agree with the statement.

• Human wants are unlimited. 
• They are unending. If one want is satisfied, another want arises and this goes on to increase. 
• Some wants occur again and again even if satisfied once.

A person does not feel sorrow when he does not obtain an object, which he has never heard of nor has ever seen.

Natural Monopoly: 

1. The monopoly power acquired by a firm due to natural advantages such as good location, control over scarce resources or natural skill, etc. 

2. The main objective of a natural monopolist is to maximise profits.

3. Monopoly due to location or may be old establishment like the TATA products or Godrej Locks, Cupboards etc., or an actor like Amir Khan.

Legal Monopoly:

1. It arises due to legal protection given to the producers by the government authorities. 

2. The objective is to prevent the competitors from producing identical products. 

3. Monopoly due to legal rights, conferred by the government such as patent right, copy right, trade marks etc

1. The monopolist is the sole seller of the product in a monopolistic market.
2. In a monopoly, both the firm and the industry are the same.

It is a state where a company with monopoly power charges different prices in different markets according to the characteristics of each market. It assumes that monopoly can clearly identify the source of demand in each market and can see pricing properly; If this can happen, then it may be able to maximize its profitability.

Correct option: (2) a, b and c

Correct option: (1) a, b, c and d

Imperfect competition is the situation of a competitive market where there are many vendors, but they are selling odd (unequal) goods in opposition to the completely competitive market scenario.

Current Account- It is the account that records imports and exports of goods, services and unilateral transfers.

Components of Current Account:

(i) Merchandise account (ii) Invisible items, and (iii) Unilateral transfers,

Capital Account - It records capital transfers such as loans and investments between one country and the rest of the world which causes a change in the asset or liability status of the residents of a country or its government.

Components of Capital Account:

(i) Private loans (ii) Movement of banking capital, (iii) official capital transactions, (iv) Reserves and monetary gold, and (v) Gold movement.

Autonomous transactions are those 'which are not influenced by other transactions in Balance of Payment Account. Accommodating transactions are those which are undertaken to cover Deficit /Surplus in BOP.

According to Prof. Thomas, “Broadly, the term is used to cover any effective price control whether supply or demand of services or of goods. It is used to mean a combination of manufacturers or merchants to control the supply price of commodities or services.”

Pure monopoly implies zero elasticity of demand in contrast to the infinite elasticity of demand which is a characteristic of pure competition.