Which of the following is NOT a feature of Monopolistic Competition?
Options
ALarge number of sellers
BProduct differentiation
CFreedom of entry and exit
DHomogeneous products
For any discrepancies in this question, email contact@cadada.in
Price Determination in Different MarketsMTP - Dec 2023Question 73 of 20
All Questions Correct Answer
✅ Option d — Homogeneous products
All Options:
- ALarge number of sellers
- BProduct differentiation
- CFreedom of entry and exit
- DHomogeneous products
Detailed Solution & Explanation
To determine which option is NOT a feature of Monopolistic Competition, let's analyze each option step by step:
• Monopolistic competition is characterized by a large number of sellers, which means there are many firms producing close substitutes, so option a is a feature of monopolistic competition.
• Product differentiation is another key feature, where firms try to differentiate their products from those of their competitors to attract more customers, making option b a feature of monopolistic competition.
• Freedom of entry and exit is also a feature of monopolistic competition, as firms are free to enter or exit the market as they wish, which aligns with option c.
• Homogeneous products, on the other hand, are a characteristic of perfect competition, not monopolistic competition, as in monopolistic competition, products are differentiated, making option d the correct answer.
The correct answer is option d because homogeneous products imply that the products are identical, which is not a feature of monopolistic competition where products are differentiated. Options a and c are incorrect because they are indeed features of monopolistic competition, representing the market structure and the ability of firms to enter or exit the market.
About This Chapter: Price Determination
Paper
Paper 4: Business Economics
Weightage
15%
Key Topics
Perfect Competition, Monopoly, Monopolistic, Oligopoly
This high-weightage chapter covers all four market structures: Perfect Competition, Monopoly, Monopolistic Competition, and Oligopoly. Students learn how price and output are determined under each structure, along with key concepts like Price Discrimination, Kinked Demand Curve, and the conditions of equilibrium (MR = MC).
View Official ICAI SyllabusExam Strategy Tip
This chapter carries the highest weightage (~15%). Focus on features of each market, the shape of AR and MR curves, and understand why firms in Perfect Competition are 'Price Takers' while Monopolists are 'Price Makers'.
Key Concepts to Understand
Related Comparison Tables
More Questions from Price Determination in Different Markets
Under which of the following forms of market structure does a firm have no control over the price of its product?
A firm encounters its "shutdown point" when:
Kinked demand curve hypothesis is designed to explain in context of oligopoly
Which of the following is not a characteristic of a "Price Taker"?
Price discrimination will be profitable only if the elasticity of demand in different markets is:
Which of the following is not an essential condition of pure competition?
Ready to Master Price Determination in Different Markets?
Practice all 20 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.
Start Practicing — It's Free