Question

How do the large companies manipulate the market ? Explain with examples. 5 marks

Answer 1

Large companies control the market by gaining the monopoly over the market by reducing the competition and hence becoming the sole producer of a particular product when it becomes the the only producer of the product it controls the prices of the product.Another way by which large companies reduce the competition is by buying small companies and not allowing them to expand.
Consider company A selling a particular laptop ,company A sells it at rate less than normal rate and hence people will buy it in large amount and hence company will generate profit as well as costumer base which will get used to their product.This is how company manipulated the market by manipulating price.

Answer 2

The large companies manipulate the market in  various ways :

(i) Large companies with huge amount of wealth,  power and riches can manipulate the market in  various ways.

(ii) At times false information is passed on through  the media and other sources to attract consumers.

(iii) For example, a company for years sold powder  milk for babies all over the world as the most  scientific product claiming this to be better than  mother’s milk. It took years of struggle before  the company was forced to accept that it had  been making false claims.

(iv) Similarly, a long battle had to be fought with  court cases to make cigarette manufacturing  companies accept that their product could cause  cancer.