MAIN MARKET FORMS

ECONOMY ASSIGNMENT
Submitted To:
Manisha Nayyar

Submitted By:
Lalit Khatana
BALLB 4th (Semester)
1805170039
 FORMS OF MARKET
STRUCTURE

IMPERFECT
PERFECT COMPETITION
COMPETITION

MONOPOLISTIC
MONOPOLY J
COMPETITION OLIGOPOLY
 PERFECT COMPETITION

A market form where there are many firms that sell a

certain homogenous product. A single firm can not
influence the market price. It is a hypothetical
situation; it cannot exist in real case scenario. In this
nobody can influence the prices, including buyers and
sellers It is also believed that everyone has equal excess
to information.
Demand Curve for a Firm in a Perfectly Competitive
Market:

The demand curve for an individual firm is equal to the

equilibrium price of the market. The market demand
curve is downward-sloping.
FEATURES
Large No. of Firms or Sellers

• Large No. of buyers

• Homogenous Product

• Perfect Knowledge

• Free Entry &Exit of Firms

• Perfect Mobility
IMPERFECT COMPETITION
MONOPOLY

MONOPOLISTIC COMPETITION

OLIGOPOLY
 MONOPOLY

The term Monopoly means ‘alone to sell’.

 In a monopoly market, there is a single seller of a
particular product with no strong competition from
any other seller
 EXAMPLES

Example
• Utility companies, such as
water and electricity, in
particular towns,

• Cell service providers in some

countries.

• Professional sports teams (the

Denver Broncos are the only
professional football team in
Denver )
FEATURES
In monopoly there should be only one seller in the market.

Monopolist has full control over the supply because he is alone in the market.

In a monopoly market the monopoly firm itself is the industry-therefore monopoly know as
single firm industry.

In monopoly, firm is in a position to determine the price in this way monopolist is price
maker.

The demand curve of monopoly firm is relatively inelastic. It is downward slopping curve. It
suggests that the monopolist can sell more output only by reducing the price.

In monopoly firm is in a position to earn abnormal profit.

In monopoly the unity of product is homogeneous.

MONOPOLISTIC COMPETITION
A market situation where we find a large number of
buyers and sellers .
Sell products that are differentiated from one another
(e.g. by branding or quality) and hence are not perfect
substitutes.
A firm takes the prices charged by its rivals as given
and ignores the impact of its own prices on the prices
of other firms.
Examples
Restaurants – restaurants compete on quality of food as much as price.
Product differentiation is a key element of the business. There are relatively
low barriers to entry in setting up a new restaurant.

Hairdressers. A service which will give firms a reputation for the quality of
their hair-cutting.

Clothing. Designer label clothes are about the brand and product
differentiation

TV programmes – globalisation has increased the diversity of tv programmes

from networks around the world. Consumers can choose between domestic
channels but also imports from other countries and new services, such as
Netflix.
FEATURES
Independent decision No entry and exit cost
Many firms
making in the long run

Buyers and Sellers do

not have perfect
Product Some degree of
information
differentiation market power
(incomplete
information)
OLIGOPOLY
OLIGOPOLY
A state of limited competition, in which a market is
shared by a small number of producers or sellers. 
There are few firms in the market, producing wither an
identical product or differentiated but the close
substitutes goods.  Oligopoly is derived from the
Greek words “oligos” which means a few and “pollen”
which means to sell.
FEATURES
(1)Few firms are working in the industry.Number of firms should be between 3
to 20 in Oligopoly market.

(2)The sellers supply either homogeneous product or differentiated product.

(3)The firm has a high degree of interdependence in their business policy

about fixing of price and determination of output.

(4)The product under Oligopoly contain high degree of cross elasticity of

demand.

(5)Advertising and selling costs have strategic importantance in an oligopoly

market.

(6)Competition is of unique type in an Oligopolistic market.each firm has to

make constant struggle with rivals.
Examples
In India, markets for automobiles, cement, steel,
aluminium, etc, are the examples of oligopolistic
market.

(i)Pepsi and Coca-Cola in the soft drink market; (ii)

Airbus and Boeing in the commercial large jet aircraft
market; (iii) Intel and AMD in the consumer desktop
computer microprocessor market.