CMR Institute of Management Studies

Department of Management and Commerce (Autonomous)

I Internal Examination – January 2013
II Semester B.Com
Sub - BUSINESS ECONOMICS-II

Time: 2 HRS Max Marks 50

Section - A

1.Answer any 5 of the following questions. Each question carries 2 marks.

1) According to Joan Robinson, “Perfect competition prevails when demand for the output
for each producer is perfectly elastic. This entails first that the number of firms is large, so
that the output of any one seller is negligibly small proportion of the total output of
commodity and second that the buyers are all alike in respect of their choice between rival
sellers ,so that the market is perfect”.

2)Features of monopoly market:-

a. Single seller
b. No close substitute
c. Complete absence of competition
d. Single control over output and supply
e. Monopolist is a price maker
f. No entry of other firms
g. No difference between firm and industry
h. Independent price output policy
i. Supernormal profit

3) Market Period Long Period

a. Market period is so short period in which a. Long period is a period
supply cannot be varied in response to long enough to adjust supply with
change in demand . change in demand.
b. Price determined is known as abnormal price. b. Price determined is known as
normal price.

4)Oligopoly is a market situation in which there are few producers specializing in the
production of identical or differentiated goods competing with one another .

5) According to Joan Robinson, “The act of selling the same article produced under a single
control at different prices to different customers is known as Price Discrimination .”

6) Dumping refers to selling goods at lower prices in the competitive international market
and at higher prices in the protected domestic market.
 7) Features of Duopoly:-
a. Two sellers selling goods in the market
b. Identical or differentiated goods
c. Two firms may either resort to competition or collusion .
d. It is a simple form of Oligopoly.

Section – B

II. Answer any 2 of the following questions. Each question carries 5 marks
1) Equilibrium of firm in the long run under Perfect Competition.

2) Conditions of Price Discrimination:-

a. Existence of imperfect market
b. Existence of different degrees of elasticity of demand in different markets
c. Existence of different markets for the same commodity
d. No contact among buyers
e. No possibility of resale
f. Legal sanction
g. Buyers illusion
h. Ignorance
i. Product differentiation
j. Non transferability feature

3) Features of Monopolistic Competition:-

a) Existence of large number of firms
b) Market is characterized by imperfection
c) Free entry and exit of firms
d) Element of monopoly and competition
e) Similar product but not identical
f) Non price competition
g) Definite preference of the comsumers
h) Product differentiation
i) Selling cost
j) The concept of industry and product group
k) More elastic demand curve

Section – C

III. Answer any 3 of the following questions. Each question carries 10 marks.
1. The Equilibrium position of a firm in Perfect Competition.
2. The price and output determination in monopoly .
3. Equilibrium in short run in monopolistic competition.
4. The influence of time element on price and output under Perfect Competition with
the help of diagrams.
 CMR Institute of Management Studies
Department of Management and Commerce (Autonomous)
I Internal Examination – January 2013
II Semester B.Com
Sub - BUSINESS ECONOMICS-II
MCQ Answer Key

Each answer carries ½ marks . Max. Marks: 5

1. (a) Perfection competition

2. (c) Demand = Supply

3. (a) Price maker

4. (c) MR

5. (c) Losses

6. (b) Different Price

7. (d) None of the above

8. (a) large number of sellers

9. (c) third degree

10. (d) Very long period