If the monopolist firm of Exercise 3 was a public sector firm. The government set a rule for its manager to accept the government fixed price as given (i.e. to be a price taker and therefore behave as a firm in a perfectly competitive market). And the government has decided to set the price so that demand and supply in the market are equal. What would be the equilibrium price, quantity and profit in this case?
If the government sets a rule for the public sector firm to accept the fixed price, then, the monopoly firm will have to behave like a perfectly competitive firm and will be a price taker. In this case, the price fixed , as set by the government, will equate the demand and the supply, which will determine the equilibrium point . At the price e Pe , the firm earns normal profit, i.e. zero economic profit.
Equilibrium price = Pe (fixed by the government)
Equilibrium quantity = Qe
Profit = Normal profit
NCERT questions are designed to test your understanding of the concepts and theories discussed in the chapter. Here are some tips to help you answer NCERT questions effectively:
If the government sets a rule for the public sector firm to accept the fixed price, then, the monopoly firm will have to behave like a perfectly competitive firm and will be a price taker. In this case, the price fixed ,...
Step-by-step explanation:
• If the government sets a rule for the public sector firm to accept the fixed price, then, the monopoly firm will have to behave like a perfectly competitive firm and will be a price taker
• In this case, the price fixed , as set by the government, will equate the demand and the supply, which will determine the equilibrium point
• At the price e Pe , the firm earns normal profit, i
• e
• zero economic profit
This question is important because it tests key concepts from the NCERT syllabus and is frequently asked in CBSE exams.
This question is based on core NCERT concepts explained in the chapter and should be revised thoroughly before exams.
Students often lose marks by skipping steps, writing incomplete explanations, or misunderstanding keywords used in the question.
Stay updated with our latest educational content and study tips
Interest is one of the most significant ideas in maths and financial calculations. It is very common in banking, loan applications, investments, saving account and competitive exams. Simple Interest and Compound Interest make it easier to find out how much more is earned and/or paid on a principal during the period of time. These Interest … Read more
Read More
In 2026, students, professionals, and job seekers must have a high level of spoken English. Spoken English is a beginner level course to enhance learners’ communication skills in English, their pronunciation, vocabulary, grammar structure and confidence in speaking English fluently. Today, the emphasis of spoken English courses is placed on actual conversations, everyday speech practice … Read more
Read More
Artificial Intelligence (AI) and Machine Learning (ML) are two of the most sought-after technologies in today’s digital era. Although these terms are often used together, they are not the same. Machine Learning is, in fact, a component of Artificial Intelligence that enables systems to learn and enhance on their own, without direct programming. AI is … Read more
Read More
Time, Speed, and Distance are some of the most important concepts in mathematics and aptitude. These are the concepts which are used to calculate the speed of an object, time taken for an object to move and the distance traveled during the motion. Questions from this topic are frequently seen in School Tests, Competitive Tests, … Read more
Read More
Student Discussion
Be the first to comment.
ADD NEW COMMENT