Q.3 Answer the following questions about market structure. [3+2+3+4=12] (a) A firm in perfect competition market structu

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Q 3 Answer The Following Questions About Market Structure 3 2 3 4 12 A A Firm In Perfect Competition Market Structu 1 (77.12 KiB) Viewed 39 times

Q.3 Answer the following questions about market structure. [3+2+3+4=12] (a) A firm in perfect competition market structure making spray taps faces the following cost function: MC = Rs. 260+ 0.4 Q Price = Rs. 1560 per Unit Questions: (i) What is the optimum quantity that this firm will make and sell in the market? (ii) What will be the minimum price at which the firm will be ready to sell 3000 units and 3400 units? Show all your calculations. (b) Pharmaceutical industry products have a high chance of presenting a Monopoly market structure for their products. Mention 2 distinct reasons why a monopoly market is likely to exist in 15-20 words each Read the following caselet and answer the questions that follow: Mr. Hari is the CEO of a firm manufacturing bath towels. His brand name is Soft Towels'. He is operating in a competitive environment, where several players are selling similar bath towels. The players understand that they will have to undertake efforts and expenses to differentiate their products to gain enough market share to meet their target of positive economic profits. Customer keep switching between brands depending on prices, sales promotions, customer services and different product features. Questions: Answer the following questions briefly based on text in the above passage: (1) What is the market structure in which Mr. Hari is operating - monopolistic or perfect competition? Give one reason to support your choice. (11) Is it necessary for Mr. Hari too to undertake efforts and expenses to differentiate his product in the long run? Why? - explain in 20-25 words. (iii) Mention one risk of incurring expenses for a sales promotion program Mr. Hari is exposed to in 10-15 words. (d) An oligopoly market has four firms. Their industry demand curve is given by the following function: Q=900-2 P Each one of them has the same TC function given by: TC= 200 + 4 Q* Where Q* is the quantity produced by each firm. Question: Use Cournot's duopoly technique to find the production of each of these firms. Show all your calculations.