case3.:

The soap market in India is charecterised by the existence of large number of firms. The soap market is divided into various categories that is mens soaps, ladies soap and common soap. There is also a small

share in the soap market, which is held by specialty soaps like baby soaps, sandal soaps, glycerin soap etc.The market growth of the soap sector is estimated to be 7% per year and it is observed that rural marketconstitutes 60% of the soap sales. There are about 700 soap manufacturing companies in India. The Indian soap markets value is estimated to be around $8 billion In this huge market, there are just a handful of keyplayers who control the major chunk of the market share. These are Godrej, Wipro and Nirma Since there are many competitors in the market , each firm spend some amount of money for the promotion of their business. It mainly includes the cost ofadvertisement and promotion. The main aim of this practice is to attract more customers.

Question-3

i) Identify the type of market mentioned in the above case? (1 mark)

ii) Discuss how the existence of many firms in soap market of India promote competition. (3 marks)

iii) How a monopoly market is different from other markets in terms of the nature of the product

available and its price? Explain

iv) In which type of market structure, the consumer welfare is maximized and why?