FORMS OF MARKET
An arrangement through which buyers and
Market
A place where goods and services
are purchased
Monopolistic competition
◆◇PERFECT COMPETITION◇◆
Features
Perfect mobility of Factors of Production
No Government Intervention
Absence of transport cost
Perfect knowledge of Market
Single Price
Large entry and exit
Homogeneous product
Large numbers of Sellers and Buyers
Meaning
Derived from Greek work 'Mono' = '
Single' and 'Poly' = 'Seller' .
There is only one seller who controls the
entire market supply for a product which
has no close substitute.
Definition
According to E. H. Chamberlin, “Monopoly
refers to a single firm which has control
over the supply of a product which has no
close substitute.”
Features
Single seller
No close substitute
Barriers to entry
Complete control over the market supply
Price maker
Price discrimination
No distinction between firm and industry
Private
Public
Legal
Natural
Simple
Discriminating
Voluntary
sellers come in contact with each other Market is a network of dealings between potential buyers and
directly or indirectly and exchange of goods potential sellers. At any point of time, a market will exist if there are :
and services takes place among them. 1) Buyers and sellers
2) A product or service to be bought and sold
3) Price of the product
4) Close contact between buyers and sellers
5) Knowledge about market
"Economists understand the term market, not any
particular market place in which things are bought
and sold, but the whole of any region in which
a. Local
buyers and sellers are in such a close contact with
one another that the prices of the same goods tend Place b. National
to equality easily and quickly".
c. International
Classification of Market a. Very short Period
a. Perfect Competition
Monopoly Competition b. Short Period
Time 自由主題
Oligopoly b. Imperfect Competition c. Long Period
d. Very Long Period
Price determination under Perfect Competition
8 Meaning The interaction of demand and supply determine price
of the commodity in perfect competition. This is known
7 A perfectly competitive market is one in which as ‘equilibrium price.’
the number of Buyers and Sellers is very large.
6
5 Definition
4 1 By Mrs.Jan Robinson
3 " Perfect competition prevails when the
2 demand for the output of each Producer
2 is perfectly elastic ".
1
◆◇◆◇◆◇◆◇ IMPERFECT COMPETITION ◇◆◇◆◇◆◇◆
MONOPOLY
Prof. E. H. Chamberlin coined this
concept in his book “Theory of
Introduction
Monopolistic Competition” which
was published in 1933.
“Monopolistic competition refers to competition
among a large number of sellers producing close but
not perfect substitutes.”
Definition
MONOPOLISTIC
3 Mixed features of Perfect Competition and Monopoly
COMPETITION
Fairly large no. of sellers
Fairly large no. of buyers
Product Differentiation
Features Free Entry and Exit
Selling cost
Close Substitutes
Concept of Group
2
Derived from the Greek words
‘Oligo’ which means few and
‘poly’ which means sellers.
Meaning
There are a few firms (sellers) in the
market producing either a homogeneous
product or a differentiated product
OLIGOPOLY Few firms or sellers
Interdependence
Advertising
Features
Entry barriers
Types
Lack of uniformity
Uncertainty