Competitive behaviour and competitive market structure are _______ related.

Question

Question

This question was previously asked in

SSC CHSL Exam 2024 Tier-I Official Paper (Held On: 10 Jul, 2024 Shift 2)

Answer 1

The correct answer is inversely

Key Points

Competitive behaviour and competitive market structure are inversely related.
As the market structure becomes more competitive, the intensity of competitive behaviour among firms tends to decrease.
Conversely, in less competitive market structures, firms are likely to exhibit more aggressive competitive behaviours to gain a larger market share.
This inverse relationship is crucial in understanding market dynamics and the strategic interactions between firms.

Additional Information

The concept of market structure and competitive behaviour is fundamental in the field of industrial organization.
Market structures can range from perfect competition to monopoly, with various forms of oligopoly and monopolistic competition in between.
In a perfectly competitive market, firms are price takers and have minimal competitive behaviour regarding pricing.
In contrast, in a monopolistic market, the single firm has significant market power and competitive behaviour can involve barriers to entry and other strategic actions.
Understanding the relationship between market structure and competitive behaviour helps in regulating markets and promoting fair competition.