Members of The Puppet Masters

Name Id Remarks

MD. 1021106

MD. 1821107

1821107

MD 1021105

MD. 1802105
Table of Contents
Members of The Puppet Masters.....................................................................................................1
Letter of Transmittal........................................................................................................................3
Acknowledgement...........................................................................................................................4
CHAPTER 1 │ The Market.............................................................................................................5
What is market?...........................................................................................................................5
CHAPTER 2 │ General market and Economic market...................................................................7
CHAPTER 3 │ Market Models.....................................................................................................16
CHAPTER 4 │ Market Differences...............................................................................................17
Conclusion.....................................................................................................................................20
 Letter of Transmittal

25 September, 2019
Afif Bin Mustakim
Lecturer of DBA,
Bangladesh Army University of Science & Technology (BAUST).
Saidpur, Nilphamari.

Subject: Letter of Transmittal

Dear Sir,
This is to inform you that we are the student of your BBA 6 th Batch. It gives us pleasure that, we
have completed successfully the group report regarding class lecture. We tried our best to utilize
resources and use the knowledge that we got through this course.
We hope that our report will be able to meet the expectation that you want from us. And if there
is any error and mistake found, we wish it will be considered with sympathy.
Therefore, we would like to request you to accept our report and oblige thereby.

Sincerely
MD. Meraz Chowdhury
MD. Najiur Rahman
Asif Hasan
MD. Rakibul Islam
MD. Mehedi Hasan Rony
 Acknowledgement

At the beginning we would like to sincere gratitude to Almighty God giving patience to finish
our report fixed time. We are thankful to our honorable teacher who giving us opportunity to use
our knowledge & this type of practice of work is helpful in the future.
Therefore, our sincere gratitude goes to honorable teacher Afif Bin Mustakim, Instructor of
Microeconomics BBA 1202 Bangladesh Army University Science & Technology (BAUST).
Without his support to enhance our knowledge about this situation this report would not be
possible.
 CHAPTER 1 │ The Market

1.1 What is market?

A regular gathering of people for the purchase and sale of provisions, livestock, and other
commodities. "They wanted to browse around the street market"

1.2 What is Market in The Economic Sense?

A market is one of the many varieties of systems, institutions, procedures, social relations and
infrastructures whereby parties engage in exchange. While parties may exchange goods and
services by barter, most markets rely on sellers offering their goods or services (including labor
power) in exchange for money from buyers. It can be said that a market is the process by which
the prices of goods and services are established.

Markets facilitate trade and enable the distribution and resource allocation in a society. Markets
allow any trade-able item to be evaluated and priced. A market emerges more or less
spontaneously or may be constructed deliberately by human interaction in order to enable the
exchange of rights (cf. ownership) of services and goods. Markets generally supplant gift
economies and are often held in place through rules and customs, such as a booth fee,
competitive pricing, and source of goods for sale (local produce or stock registration).

1.3 What is Market in The General Sense?

The stock exchange is a big market for capital turnover and the correct setting of prices for
goods, securities and currency. Exchange is a money market for states, enterprises, firms,
associations and corporations. It acts as an intermediary between those who are looking to invest
capital and those who need it, that is, regulates credit, money, payment relations both in the
country of placement and between states.
The economic essence of exchanges is that it is a market of substitute values; has a specific
organization; the participants of the stock trading realize their own profit through it; official
quotation is made; quoted specific stock commodity is possible; it serves as an insurance
company for price and exchange rate risks; gives a digital expression of supply and demand;
places goods and financial instruments in space and time; it establishes objective prices and
rates.
 CHAPTER 2 │ General market and Economic market

2.1 Different between General market and Economic market:

2.1.1 General Market:

General market factors refer to the overall conditions within a defined market that affect all
properties within that market. These factors are influenced by the demographic, economic, and
locational characteristics of a market. General market factors change over time with
demographic patterns, economic and business cycles, employments trends and government
policies, amongst other factors. As an example, rising unemployment in a region could cause
office rental rates to decrease and tenant defaults to increase throughout that region. This differs
from a property-specific factor such as a particular tenant declaring bankruptcy and thus
defaulting on his or her lease.

In most enlightened companies these days, marketing resources are allocated to different target
populations. Some of the more common groups are tied to ethnicity and culture: Hispanic,
African American, and Asian American. The bulk of the marketing (and other) resources,
however, are firmly allocated to the so-called "General Market," even at companies that have
been leaders in marketing to minority populations.

This seems like a reasonable approach to budget allocation: assign resources proportionately to
population so that larger groups get more resources and smaller groups receive fewer.

The potential pitfall of this approach is that overall the lion's share of the marketing resources is
allocated to marketing to the general or mainstream market.

The other element to consider is each group's relative consumption of the product. For example,
Hispanics live in larger households than the general population. That increases their
consumption of certain products and services, further increasing their relative impact on a
brand's sales performance.
2.1.2 Economic Market:

A market economy is a system where the laws of supply and demand direct the production of
goods and services. Supply includes natural resources, capital, and labor. Demand includes
purchases by consumers, businesses, and the government.

Businesses sell their wares at the highest price consumers will pay. At the same time, shoppers
look for the lowest prices for the goods and services they want. Workers bid their services at

the highest possible wages that their skills allow. Employers seek to get the best employees at
the lowest possible price.

Capitalism requires a market economy to set prices and distribute goods and services. Socialism
and communism need a command economy to create a central plan that guides economic
decisions. Market economies evolve from traditional economies. Most societies in the modern
world have elements of all three types of economies. That makes them mixed economies.


2.2 General, Modern & Ancient Markets:

2.2.1 General Market:

A market is defined as the sum total of all the buyers and sellers in the area or region under
consideration. The area may be the earth, or countries, regions, states, or cities.

The value, cost and price of items traded are as per forces of supply and demand in a market. The
market may be a physical entity, or may be virtual. It may be local or global, perfect and
imperfect.

A market can be called the 'available market' - that of all the people in the area. Within the
available market, there is the 'market minimum'- or the market size, which will buy goods
without any marketing effort. This is the lowest sale that a company could get without any action
on its part. In today's world, this level is sinking ever lower.

2.2.2 Modern Market:

Modern marketing in this sense is no longer the traditional marketing method where an ad was
created and then that was that. Modern marketing is about customer experience at every
touchpoint, building relationships with customers, adapting continuously the new digital
landscapes, and marketing across multiple channels to reach different consumers. Modern
marketing is personal. Traditional methods still matter, but they must be incorporated into
modern marketing strategies. Building a modern marketing plan requires several components: (1)
Tech Stack; (2) Skills (3) Team; (4) Measurement; and (5) On-going education. This guide will
touch on each of those. But first, we need to address something else.

Consumers can purchase anything, anywhere, at any time, using almost any technical device that
is Wi-Fi capable. The kinds of purchases — the planned ones versus the impulsive ones —
haven’t changed, but behaviors associated with how they are purchased has changed. From
wearable gadgets to your phone to your laptop, digital shopping is the norm. Some key points
about the modern-day buyer and behavior include:
Online research. If you are the kind of shopper that likes to research your product first, then you
likely start online. In fact, virtually every buyer doesn’t whether consumer or enterprise. Buyers
are highly informed by the time they talk to sales or get close to their purchase moment. From
his or her own experience, a buyer knows that there is a range of prices out there contingent on
quality, seller source, quantity, etc., and technology is helping them make smarter choices in a
time-efficient manner.

Social Media. Your research probably will tend to involve social media, including reviews of
products made by the general population and by people you follow on social media (e.g.,
marketing influencers). Social media and personal reviews in many ways matter more today than
advertisements.

Buyer Controlled. There are a lot of choices, and many are comparable given the competitive
nature of the Internet. Buyers are deciding what they need and when they need it; marketers are
no longer the source of that knowledge alone.

Indecisive. With more options follow more indecisions; too much to choose from. Consumers
place items in shopping carts and then leave it to look for the same or other products elsewhere.
Sometimes they return, sometimes they don’t, and sometimes it is strategic on their part. Imagine
going into a brick and mortar store and placing items in a cart and then leaving it at the checkout
counter.

Brands, or No Brands. The focus isn’t necessarily on the brand, but then again, it depends on the
purchase. Some brands demand loyalty and get it through integrity, others not so much. Consider
Apple. Then consider your toothbrush. One brand you’re loyal to, the other you may not care so
much except that it does the job. Both are ordered online.

Personalized Buying Behavior. As the above suggests, and whether it’s shopping in the
marketplace, big retail stores, or web stores, buying behavior is personal. Consumers are a
diverse group of people, and they all have different ways to purchase different things. Some

prefer online research via their computer for big items to purchase while they use their
smartphone to search for local purchases. The digital age is the personalized age.
2.2.3 Ancient Market:

In modern life, with its constant changes large and small, investment and policy decisions may
turn on the question of what constitutes a fundamental change for businesses. A fundamental
change disrupts existing practices in major ways, hard to foresee. Incremental changes have a
more predictable effect. Moreover, business may experience a change quite differently than do
other parts of society.

During the period of business’s early formation in the Middle East, quite possibly the greatest
single social change was the coming of the Iron Age, around 1000 B.C. Iron dramatically
undercut the cost of tools, armor, and weaponry. A cooking tripod was worth three women or
twelve oxen to Bronze Age Achilles, but only a small fraction of that in the Iron Age.1 Cheap
iron brought many tools and implements within reach of ordinary people, greatly increasing
productivity and wealth. Inexpensive iron armaments equipped huge armies, making great
empires possible, such as those of the Assyrians (1000-640 CE) Babylonians (640-580 CE), and
Persians (580-334 CE).

Yet the Iron Age changed business very little. Society’s economic organization within the great
empires, in which elites distributed the benefits, hardly changed. Business had been a marginal
activity in such economies since the dawn of civilization in Sumeria and Egypt 2000 years
earlier. What businesses did, with whom, and to what small economic effect, scarcely changed
with the coming of the Iron Age.

By contrast, the far less noted invention of coins profoundly altered the role and practices of
business. Coins made possible the markets and entrepreneurial businesses that would shape
urban economies throughout the Mediterranean and Roman worlds.

Before coins there was barter, a slow and uncertain method of exchange. One party may not want
what the other offers, or the offers may not have equivalent values. Coins, however, were a
reliably valuable, divisible and acceptable form of wealth. These qualities make them easy to
exchange because their value was trustworthy, “trust inscribed” according to one expert.2 As a
result, values so measured were widely understood, and coins became a reliable way to hold
wealth.3
The first coins appeared in the Anatolian kingdom of Lydia, late in the 7th century BCE. An
amalgam of gold and silver called electrum had made its kings, such as Midas and Croesus,
fabulously wealthy.4 The exact proportion of gold and silver varied in each nugget, but that only
mattered when Lydia’s rulers sought to hire Greek mercenaries, the best fighters around. Their
demand for exact recompense led Lydia’s rulers to refine electrum into gold and silver coins,
stamped to guarantee weight and purity. Coins proved so popular that neighboring Greek city-
states began issuing their own, which soon supplanted barter in their economic transactions.

Their transactions multiplied as coins made them faster and easier. Monetary prices also
improved information about values and supply and demand, reducing risks for entrepreneurial
traders and vendors. Wares became more available, stimulating consumer interest by their
presence and visibility in the market. As a result, a market economy based on entrepreneurial
business became a popular, even defining feature of Greek urban life. The conquests of
Alexander the Great and the Romans brought such market economies to towns and cities
throughout the western world.

The difference between the impact on business of the Iron Age and of coinage cautions us to
ignore the “shock and awe” of change as a general proposition, and to focus on the practical
details of exactly how a change works in reality.

Compare, in this light, the advent of globalization and of microprocessors. Globalization has
attracted enormous attention and generated undeniably important consequences. While wreaking
havoc on U.S. and European workforces it has considerably raised the level of manufacturing
productivity, brought vast new populations into the modern economy, and lowered consumer
prices almost everywhere. International investment opportunities have greatly expanded, along
with a great reshuffling of business organizations and relationships. In one recent analysis,
globalization even gets considerable blame for the current depression8 in the United States and
Europe.

Based on the example of the Iron Age, however, I doubt that globalization, consequential as it is,
represents fundamental business change. Larger markets, more far-flung business organizations,
disrupted supply-chains, new competition, additional investment opportunities, and even the
internationalization of labor are hardly new. Even the costs and possible benefits of globalization
that I discuss later do not represent fundamental change to the nature or functions of business.
By contrast, the invention of microprocessors has brought changes that seem more fundamental
to business, perhaps even comparable in scope and impact to the invention of coins. Computers,
running on microprocessors, have enabled whole new fields of knowledge (like genomics), new
types of work, and new businesses. Computer-aided design and manufacturing have given us
products never before possible. Microprocessors power the virtually instantaneous
communication and information capabilities that are transforming purchasing, innovation,
marketing, sales, and organizational structures. Because the different impact of Iron Age
technology and coinage foreshadows the different impact of globalization and microprocessors, I
conclude that high technology, in general, offers better investment possibilities than does
globalization.
 CHAPTER 3 │ Market Models

3.1 Market Models:

A modern economy has many different types of industries. However, an economic analysis of
the different firms or industries within an economy is simplified by first segregating them into
different models based on the amount of competition within the industry. There are 4 basic
market models: pure competition, monopolistic competition, oligopoly, and pure monopoly.
Because market competition among the last 3 categories is limited, these market models are
often referred to as imperfect competition.

3.2 Purely competitive market: In a purely competitive market, there are large numbers of firms
producing a standardized product. Market prices are determined by consumer demand; no
supplier has any influence over the market price, and thus, the suppliers are often referred to as
price takers. The best examples of a purely competitive market are agricultural products, such as
corn, wheat, and soybeans.

3.3 Monopolistic competition: Monopolistic competition is much like pure competition in that
there are many suppliers and the barriers to entry are low. However, the suppliers try to achieve
some price advantages by differentiating their products from other similar products. Most
consumer goods, such as health and beauty aids, fall into this category.

3.4 Oligopoly: An oligopoly is a market dominated by a few suppliers. Although supply and
demand influence all markets, prices and output by an oligopoly are also based on strategic
decisions: the expected response of other members of the oligopoly to changes in price and
output by any 1 member. A high barrier to entry limits the number of suppliers that can compete
in the market, so the oligopolistic firms have considerable influence over the market price of
their product.
3.5 Pure monopoly: A pure monopoly has pricing power within the market. There is only one
supplier who has significant market power and determines the price of its product. A pure
monopoly faces little competition because of high barriers to entry, such as high initial costs, or
because the company has acquired significant market influence through network effects, such as
Facebook, for instance.
 CHAPTER 4 │ Market Differences

Let us now compares the different market structures on the basis of:

• Degree of Price Control

• Nature of Demand Curve

• Influence on Activities of other Firms

• Overall Comparison

4.1 Degree of Price Control

i. Perfect Competition: A firm under Perfect competition is a Price-taker, i.e. an individual

firm has no control over the price and has to accept the price as determined by the market forces
of demand and supply.

ii. Monopoly: A monopolist is a Price-Maker, i.e., a firm has complete control over the price
and fixes its own price.

iii. Monopolistic Competition: A firm under monopolistic competition has partial control over
the price, i.e. each firm is neither a price-taker nor a price-maker. An individual firm is able to
influence the price by creating a differentiated image of its product through heavy selling costs.

iv. Oligopoly: A firm under oligopoly follows the policy of price rigidity. Although, the firm
can influence the prices, but it prefers to stick to its prices so as to avoid a price war.

4.2 Nature of Demand Curve

i. Perfect Competition: The demand curve for a perfectly competitive firm is perfectly elastic
as it has to accept the price fixed by the market forces of demand and supply.
ii. Monopoly: The monopoly firm faces a downward sloping demand curve as more quantity
can be sold only at a lower price.

iii. Monopolistic Competition: The firm under monopolistic competition also faces a
downward sloping demand curve as more quantity can be sold only at a lower price. However,
the demand curve is more elastic in comparison to demand curve under monopoly because of
presence of close substitutes.

iv. Oligopoly: The demand curve for an oligopoly firm is indeterminate, i.e. it cannot be drawn
accurately as exact behavior pattern of a producer cannot be ascertained with certainty.

4.3 Influence on Activities of other Firms:

i. Perfect Competition: Each firm is so small that its behavior has no influence on the decisions
of other firms operating in the market.

ii. Monopoly: There is only one firm in the industry. Therefore, the question of reaction from
other firms does not arise, i.e. monopolist has full control over the industry.

iii. Monopolistic Competition: There are large numbers of firms and behavior of each firm has
less impact on activities of other firms.

iv. Oligopoly: There are few firms and behavior of each firm has significant impact on activities
of other firms.
4.4 Overall Comparison:

Perfect Monopolistic
Basis Monopoly Oligopoly
Competition Competition
Very large num- Single seller Large number of Few Big sellers
Number of ber of sellers sellers
sellers

Homogeneous No Close Closely related Products are

Products Substitutes but homogeneous
differentiated under Pure
Nature of Products Oligopoly and
product differentiated
under
Differentiated
Oligopoly
Freedom of Entry of new Freedom of Restrictions on
Entry and Exit entry and exit firms and exit of entry and exit entry of new
of Firms old firms is firms
restricted
Perfectly elastic Downward slop- Downward Indeterminate
demand curve ing demand sloping demand demand curve
Demand Curve
curve (less (but more
elastic) elastic)
Uniform price as Firm is a price- Firm has partial Price rigidity
each firm is a maker. So, price control over due to fear of
Price price-taker discrimination is price due to price war
possible. product
differentiation
No selling costs Only High selling Huge selling
are incurred informative costs are spent costs are
Selling Costs
selling costs are incurred
incurred
 Perfect Imperfect Imperfect Imperfect
Level of
Knowledge Knowledge Knowledge Knowledge
Knowledge