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Wednesday, July 24, 2013



MICROECONOMICS Presentation Transcript: 

2.MARKETS-meaning and features
Market means interaction of buyers and sellers in order to carry  on transactions of goods and services.
Not necessarily a meeting place.
No face to face contact  is necessary
The market facilitates trade and enables the distribution and allocation of resources in a society.
Markets allow any tradable item to be evaluated and priced.

3.Classification of markets

4.Classification based on place-
Local Market or Regional Market.
National Market or Countrywide Market.

International Market or Global Market.

5.On the basis of Competition, market is classified into:
Perfectly competitive market structure.
Imperfectly competitive market structure.

6.Perfect Competition market
1. Many Sellers
2. Many Buyers
3. Homogenous Product
4. Zero Advertisement Cost
5. Free Entry and Exit
6. Perfect Knowledge
7. Perfect Mobility of Factors
8. No Government Intervention
9. No Transport Cost

A single seller has complete control over the supply of the commodity.
There are no close substitutes for the product.
There is no free entry and exit because of some restrictions.
There is a complete negation of competition.
Monopolist is a price maker.
Since there is a single firm, the firm and industry are one and same i.e. firm coincides the industry.
Monopoly firm faces downward sloping demand curve. It means he can sell more at lower price and vice versa. Therefore, elasticity of demand factor is very important for him.

8.Types of monopoly-
1. Perfect Monopoly
2. Imperfect Monopoly
3. Private Monopoly
4. Public Monopoly
5. Simple Monopoly
6. Discriminating Monopoly
7. Legal Monopoly
8. Natural Monopoly
9. Technological Monopoly
10. Joint Monopoly

1.Profit maximisation conditions
2.Ability to set price
3.Entry and exit
4.Number of firms
5.Long run profits
6.Product differentiation
7.Perfect knowledge

10.Monopolistic competition
Monopolistic competition
1. Large Number of Sellers
2. Product Differentiation
3. Freedom of Entry and Exit
4. Selling Cost
5. Absence of Interdependence
6. Two Dimensional Competition
7. Concept of Group
8. Falling Demand Curve

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