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NIOS Class 10 Economics Chapter 12 Market
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Market
Chapter: 12
MODULE 4: DISTRIBUTION OF GOODS AND SERVICES
TEXTBOOK QUESTIONS (SOLVED)
INTEXT QUESTIONS 12.1
Q.1. Fill in the blanks:
(i) A market exists where there is _________ between buyers and sellers.
Ans. Interaction.
(ii) Buying and selling takes place in a _________.
Ans. Market place.
(iii) The process of _________ and _________ takes place simultaneous in market place.
Ans. Buying, selling.
(iv) A market has existence of buyers and sellers, communication between them and _________.
Ans. Commodity.
INTEXT QUESTIONS 12.2
Q.1. What is meant by monopoly?
Ans. Monopoly is a market structure in which a single seller is producer of all the product and there is no close substitute of product sold by the monopolist.
Q.2. Give two examples of monopoly in India.
Ans. (i) Atomic Energy.
(ii) Indian Railways.
(iii) Posts and Telegraphs.
Q.3. Why is there no difference between firm and industry under monopoly?
Ans. Because monopolist is the single producer/seller.
Q.4. Whether the monopoly firm is price-maker or price-taker?
Ans. Monopoly firm is price-maker.
Q.5. What do you mean by “free entry” under perfect competition?
Ans. “Free entry” means sellers under perfect competition are free to move in and out of the market. There are no barriers on entry of new firms.
Q.6. Say Yes or No:
(a) There is one seller under perfect competition.
Ans. No.
(b) There are different goods sold under perfect competition.
Ans. No
(c) Government interferes in production under perfect competition.
Ans. No.
(d) Product is perfect substitute under perfect competition.
Ans. Yes.
(e) Buyers have perfect knowledge about product under perfect competition.
Ans. Yes.
INTEXT QUESTIONS 12.3
Q.1. Give some examples of retail outlet in your locality. Act
Ans. (i) Stationery shops.
(ii) Kendriya Bhandar.
(iii) Mother Dairy.
(iv) Chemist Shops.
Q.2. Define wholesaler.
Ans. A wholesaler is a distributor or middleman who sells mainly to retailers and institutions rather than consumers.
Q.3. Define retailer.
Ans. A retailer may be defined as a person who sells varieties of goods or services directly to the general public.
Q.4. Define retail market.
Ans. A retail market is that market in goods are sold in small lots.
TERMINAL EXERCISE
Q.1. Define market.
Ans. Market may be defined as arrangement in a given area where buyers and sellers come in contact with each other directly or indirectly to buy or sell goods.
Q.2. Define Perfect Competition.
Ans. Perfect competition may be defined as a market structure where many firms sell a homogenous products, where there is free entry and exit and where buyers and sellers have perfect knowledge about the market situation.
Q.3. Define Monopoly.
Ans. Monopoly may be defined as a market structure in which one firm possesses control over the market and sells a unique product having no close substitute.
Q.4. Differentiate between retail market and whole-sale market.
Ans. Students do Yourself.
Q.5. Explain the features of Perfect Competition.
Ans. Features of Perfect Competition: Following are the features of Perfect Competition:
(i) Large number of buyers and sellers: A competitive market has a large number of sellers selling the commodity to large number of buyers. It is due to this fact that each firm in the competitive.
(ii) Homogenous Product: Product sold in the perfect are homogenous i.e. they are identical in all respects like quality, colour, size, weight, design etc. so the product in a perfect substitute.
(iii) Free entry and exit: Under perfect competition there is no bar on any new firm or producer to enter the market to sell or produce the product. Similarly if any existing seller wants to exit then he is free to do so.
(iv) Role of Government: The government’s role is to provide protection to sellers and do not interfere in business.
(v) Perfect knowledge about the product: Under perfect competition sellers and buyers have perfect knowledge about the product.
(vi) No bar on factors of Production: There is no bar on factors of production such as labour etc. to move from one production unit to another to do work.
(vii) Aim: The aim of every firm to maximise its profit.
Q.6. Explain the features of Monopoly.
Ans. Features of Monopoly: Following are the features of Monopoly:
(i) A single firm: The monopolist is the only producer of the good. He has got no competitor. He is the only one who rules the market his commodity.
(ii) No close substitute of the commodity: There are no close substitutes of the commodity produced by the monopolist produces all the output in a particular market.
(iii) Price maker: The monopolist being the sole seller of the commodity in the market decides the price of the commodity as there is no one to challenge his price. The monopolist is a ‘price-maker’. It does not mean that monopolist can fix both price and the quantity demanded. If he fixes a high price, less quantity of the commodity will be demanded.
(iv) No Entry of new Firm: It is not possible for new firms to enter in the market and compete with the single seller. Being the single seller or firm, there is no difference between firm and industry under monopoly.
Q.7. Do you think that retailer is concerned about the location and presentation of goods that he offers for sale? If Yes, Why?
Ans. Yes. The retailer is concerned about the location and presentation of goods that he offers for sale due to following reasons:
(i) A retailer outlet must be located nearer so that people can easily come to buy goods services.
(ii) The shops must be decorated to attract the customers.
SOME IMPORTANT QUESTIONS FOR EXAMINATIONS
VERY SHORT ANSWER TYPE QUESTIONS
Q.1. Can a market exist without personal contact of buyers and sellers in Economics?
Ans. No, it cannot exist.
Q.2. What does the term “market” ordinarily refer to?
Ans. Ordinarily, the term market refers to a place where goods are purchased and sold such as Chandni Chowk in Delhi.
Q.3. “Market refers to the arrange- ment in given area whereby buyers and sellers come in contact with each other directly or indirectly to buy or sell goods.”
Name any three requisites of a market given in the above statement.
Ans. (i) Area.
(ii) Contact between buyers and sellers directly or indirectly.
(iii) Goods which are to be sold or purchased (traded).
Q.4. Is “face to face contact between buyers and sellers” necessary for market?
Ans. No, there may be indirect contacts between buyers and sellers. Buyers and sellers can carry on their transactions indirectly through telephone, mobile or internet.
Q.5. State the important features of a market.
Ans. Important features of market are:
(i) Commodity.
(ii) Buyers and Sellers.
(iii) Communication.
Q.6. What does commodity mean as a feature of a market?
Ans. Commodity means goods and services which are to be traded (bought and sold).
Q.7. Where does the process of buying and selling take place simultaneously?
Ans. The process of buying and selling takes place simultaneously in the market.
Q.8. What do you mean by structure of market?
Ans. By structure of market we mean nature of the product, number of sellers and buyers in the market.
Q.9. What does the word monopoly mean?
Ans. The word “Monopoly” means single seller.
Q.10. Does there exist any competition in monopoly?
Ans. No, monopoly rules out any sort of competition.
Q.11. Why does the seller not face any competition in monopoly?
Ans. Because in this market there are no other sellers of the product he is selling.
Q.12. Name any two areas in which the Government of India has monopoly.
Ans. The Government of India has monopoly in atomic energy and defence.
Q.13. Who produces all the output in monopoly?
Ans. The monopolist (a single seller) produces all the output in monopoly.
Q.14. Who has monopoly over public water system and railways?
Ans. Government of India has monopoly over public water system and railways.
Q.15. “There are no close substitutes of the commodity produced by the monopolist.” What does close substitute mean?
Ans. “Close substitute” means another similar product having same use.
Q.16. Who decides the price in monopoly?
Ans. The monopolist decides the price in monopoly.
Q.17. What does “price-maker” mean?
Ans. Price-maker means deciding the price of the product.
Q.18. Can monopolist fix both prices and the quantity demanded?
Ans. No, he cannot decide both. He can fix any one of the two. He can either fix the price or quantity to be sold.
Q.19. Suppose a monopolist fixes high price. What will be its effect on his sale?
Ans. He will be able to sell less quantity of the commodity.
Q.20. In which market structure, there is no difference between firm and industry. Why?
Ans. In monopoly, there is no difference between firm and industry, because there is only one seller in the market.
Q.21. What is the main aim of monopolist?
Ans. Main aim of monopolist is to maximise profit.
Q.22. What does “No entry of new firm” mean?
Ans. “No entry of new firm” means it is not possible for new firms to enter the market and compete with the single seller.
Q.23. Name the other extreme of monopoly market.
Ans. Perfect competition.
Q.24. What do you mean by homogeneous product?
Ans. Homogeneous product means that the product produced by all the sellers is same in respect of colour, taste, weight, packaging etc.
Q.25. What is the governments role in perfect competition?
Ans. The government’s role in perfect. competition is to provide protection and not to interfere in business.
Q.26. What do you mean by “There is no bar on the factors of production”?
Ans. It means that all the factors of production has freedom to move from one firm to another. For example, labour has the freedom to leave any production unit and join the other one to do work.
Q.27. Do we see the situation of monopoly or perfect competition in real world?
Ans. No, monopoly and perfect competition are extreme situations.
Q.28. “In perfect competition, a firm is price-taker and not price-maker.” What does it mean?
Ans. It means that in perfect competition, a firm does not decide the price of its product. It accepts the price determined by the industry.
Q.29. State any four different branded soaps.
Ans. (i) Lux.
(ii) Dove.
(iii) Liril.
(iv) Godrej.
Q.30. What are differentiated goods?
Ans. Differentiated goods are those which are used for same use, but are different in terms of colour, packaging, fragrance, taste etc.
Q.31. What is imperfect competition?
Ans. Imperfect competition is a market situation in which there is neither perfect competition nor perfect monopoly. It is a situation where both the monopoly and competitive elements are present.
Q.32. Name the factors which determine the market structure.
Ans. (i) Number of buyers and sellers (firms).
(ii) Nature of commodity (homogeneous or differentiated).
(iii) Nature of competition (Perfect or Imperfect).
Q.33. What are main forms of market?
Ans. Main forms of market are:
(i) Perfect Competition.
(ii) Monopoly.
(iii) Monopolistic Competition (Imperfect Competition).
Q.34. Which market has homo- geneous products?
Ans. Perfect Competition.
Q.35. How many firms are there in monopoly?
Ans. There is a single firm in monopoly.
Q.36. Out of perfect competition and monopoly which market is price-maker?
Ans. Monopoly.
Q.37. Give the nature of product sold in perfect competition.
Ans. Homogeneous product.
Q.38. In type of market, buyers have perfect knowledge about the product?
Ans. In perfect competition.
Q.39. Write the nature of soap meant for taking bath in
(a) Perfect Competitions.
(b)Imperfect Competition.
Ans. (i) In perfect competition, soap will be of one type.
(ii) In imperfect competition, soap will be differentiated.
Q.40. Under perfect competition, who is price-maker and who is price-taker?
Ans. Under perfect competition, industry is the price-maker and firm is the price-taker. dug 19
Q.41. What is a firm?
Ans. A firm is a producing unit which produces goods and services for sale.
Q.42. What is an industry?
Ans. An industry is an aggregate of all the firms producing the same commodity.
Q.43. Which feature/features of imperfect competition (monopolistic competition) is/are competitive in nature?
Ans. (i) Large number of buyers and sellers.
(ii) Free entry and exit of the firms in the market.
Q.44. Give two examples of monopolistic competitive market.
Ans. (i) Toothpaste.
(ii) Shoes.
Q.45. The seller product differentiation is the feature of which market?
Ans. It is the feature of monopolistic competition (Imperfect Competition).
Q.46. Name that feature which is common to both perfect competition and imperfect competition.
Ans. Free entry and exit of firms.
Q.47. In which market all the sellers incur heavy expenditure on advertisement?
Ans. In imperfect competition.
Q.48. Why is imperfect competition called monopolistic competition?
Ans. Imperfect competition is called monopolistic competition because it contains both the competitive element and monopoly element.
Q.49. Which market represents blending of two extremes-perfect competition and monopoly?
Ans. Monopolistic competition represents blending of two extremes-perfect competition and monopoly.
Q.50. the two extremes of markets.
Ans. (i) Perfect competition and
(ii) Monopoly.
Q.51. When is a firm called a price-taker?
Ans. A firm is called a price-taker when it accepts the price determined by market demand and market supply.
Q.52. Classify market on the basis of channels or saleable lots.
Ans. (i) Wholesale Markets.
(ii) Retail Markets.
Q.53. Who is wholesaler?
Ans. A wholesaler is a distributor or middleman who sells mainly to retailers and institutions rather than consumers.
Q.54. What is a wholesale market?
Ans. A wholesale market is that market in which goods are transacted in big lots.
Q.55. Who is the essential link between manufacturers and end- consumers?
Ans. A wholesaler.
Q.56. Write down any service of a wholesaler to manufacturers.
Ans. In the presence of wholesalers manufacturers are in comfort zone as they can sell that products in large quantities and focus on business and production.
Q.57. Give the channel of distribution.
Ans.
Q.58. To whom do the retailers sell the goods normally?
Ans. Retailers normally sell goods to the ultimate consumers.
Q.59. Whose position is most important in the channel of distribution of goods and services?
Ans. In the channel of distribution of goods and services the position of a retailer is most important.
Q.60. Why is the position of a retailer most important in the channel distribution of goods and services?
Ans. Because a retailer is in direct contact with the final consumers.
Q.61. Why should a retail outlet be located nearer to residential localities?
Ans. A retail outlet should be located nearer to the residential localities so that people can easily come to buy goods and services.
Q.62. Why has the retailer to incur lot of expenditure on decoration of offices, shops and proper presentation of commodities?
Ans. The retailer has to incur lot of expenditure on decoration of offices shops and proper presentation of the commodities so that consumers are attracted towards the retail shops.
Q. 63. In which market there is product differentiation?
Ans. In monopolistic competition.
Q.64. Give any two features of perfect competition.
Ans. (i) There is a large number of buyers and sellers in the market.
(ii) The products are homogeneous.
Q.65. Why are there no selling costs in perfect competition?
Ans. There are no selling costs in perfect competition as the products in this market are homogeneous.
Q.66. In which type of market, uniform price prevails?
Ans. Uniform price prevails in the perfect competition.
Q.67. How are products differentiated?
Ans. Products are differentiated by changing the colour, size, weight, taste, flavour, packages etc.
Q.68. Identify the market form, given the following information:
Ans. Perfect Competition.
Q.69. Which type of market is myth in the real world?
Ans. Perfect competition.
Q.70. Give one point of difference between perfect competition and monopoly.
Ans. In perfect competition, the firm is price-taker whereas in monopoly the firm is price-maker.
Q.71. In which form of a market, a firm has a negligible role in the determination of price of a commodity?
Ans. In a perfectly competitive market.
