Question

Explain what policies might be adopted to flatten the price line of the firm in imperfect competition.

Answer 1

Ans:-Imperfect competition is a competitive market condition.In imperfect competition there are many sellers they are selling varied/dissimilar goods as conflict to the perfect competitive market firm.Here sellers are raise the price of the product and earn profit.Monopoly,monopolistic competition,oligopoly are the best examples of imperfect competition.There are many policies adopted to flatten the price line of the firm in imperfect competition.

1.The government intervention in imperfect competition market to promote increase efficiency in products or distribution in the form of monetary policy,fiscal policy or market regulation.

2.Antitrust law is one of the common intervention by the government in market price regulation.

3.Government may also use other methods like regulation of price in the imperfect competition market is taxation,government quotas,license and tariff.