Given below are two statements:

One is labelled as Assertion A and the other is labelled as Reason R.

Assertion ‘A’: The theories of price determination under oligopoly are found to be inapplicable to real life market conditions.

Reason ‘R’: Real life oligopoly market situation is characterized by small number of sellers, interdependence of decision making, barriers to entry, indeterminate price and output; all leading to wide variety of situations.

In the light of the above statements, choose the most appropriate answer from the options given below: 

The correct answer is Both A and R are correct and R is the correct explanation of A.

Key Points Assertion 'A' is true, and Reason 'R' is a correct explanation of Assertion 'A'.

Assertion ‘A’: The theories of price determination under oligopoly are found to be inapplicable to real life market conditions.

The theories of price determination under oligopoly, which assume perfect competition or monopoly, are often found to be inapplicable to real-life market conditions. Oligopoly markets are characterized by a small number of sellers, interdependence of decision making, barriers to entry, and indeterminate price and output. These factors create a wide variety of situations that make it difficult to apply traditional price determination theories.

Reason ‘R’: Real life oligopoly market situation is characterized by small number of sellers, interdependence of decision making, barriers to entry, indeterminate price and output; all leading to wide variety of situations.

Reason 'R' provides a valid explanation for Assertion 'A' by highlighting the specific characteristics of real-life oligopoly markets. The presence of a few dominant sellers, the interdependent nature of decision making, and the existence of barriers to entry result in complex pricing dynamics that cannot be adequately captured by traditional price determination theories.

Therefore, Assertion 'A' is true, and Reason 'R' is a correct explanation of Assertion 'A'.