ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In a perfectly competitive market, if any firm is able to earn an economic profit, other firms will immediately enter the market, driving economic profit to zero. In a perfectly competitive market, each firm is a price taker, meaning that it has no control over the price.

Detailed explanation-2: -Answer and Explanation: A monopoly is defined as a market structure where there is a single firm that controls the entire market. Therefore, in such a market entry of other firms is prohibited and firms earn supernormal profit. The correct answer is c-monopoly.

Detailed explanation-3: -Perfect Competition Uner competition, the firms have no control over the price. They have to sell the products at a price predetermined by the industry. Under perfect competition, firms can’t charge high prices as both sellers and buyers have perfect knowledge about the goods and their prices.

Detailed explanation-4: -In economic theory, perfect competition occurs when all companies sell identical products, market share does not influence price, companies are able to enter or exit without barriers, buyers have perfect or full information, and companies cannot determine prices.