MARKET

• In economics sense market refers to an arrangement where buyers and

sellers come in contract with each other directly or indirectly to sell and
buy goods.

• FEATURES OR CHARECTERISTIC OF MARKET

1)      It does not refer to any fixed location; it can also exist in an absence
of place.
2)      It is an arrangement, where there is an exchange of goods.
3)      There is the existence of different prices for specific commodities.
4)      There is a competition between buyers and sellers. The demand &
supply forces determine the price of a commodity in the market.
 STATE THE DIFFERENT TYPES OF
MARKET
1)       MONOPOLY : -
• In this category of market. In which there is a single seller who dominates the market
where there is no close substitute & no competition exist.
2)      DUOPOLY :-
• Duopoly is a category in which two seller dominate the market.
3)      OLIGOPOLY :-
• Oligopoly is market in which few sellers compete with each others to sell their
products.
4)      MONOPOLISTIC COMPETITION :-
• It is a market category in which there are many seller & buyers. The product is
heterogeneous.
5)      PERFECT COMPETITION :- ( BY ADAM SMITH)
• Perfect competition refers to a market in which there are large no. of buyer and seller
involved in the activities of buying and selling homogeneous product at a single
uniform price.
 FEATURES OF PERFECT COMPETITION:-
FEATURE OF PERFECT COMPETITIVE MARKET (IMPORTANT)

1)      LARGE NUMBER OF SELLER :-

• There is an existence of large number of seller, which is a unique feature
of this competitive market, as there is a numbers of sellers. The sellers are
not in a position to influence market price. The market price is determined
by the force of total demand and total supply. The price in this market is
uniform. Thus the sellers are “Price taker” and not “Price Makers”
2)      LARGE NUMBER OF BUYERS :-
• The buyers are very large in numbers in a perfect competitive market. A
single buyer cannot influence the market demand. Therefore he is also a
“Price Taker”.
3)      HOMOGENEOUS PRODUCT :-
• In a perfectly competitive market, the product of all firms is homogeneous
that is identical in single shape, color, design, etc…. (Substitute goods)
4) IGNORES GOVERNMENT INTER SENTENCE :-
Government inter sentence may living about tariffs (Tax),
subsidies, controls licensing that can disturb the free functioning
of the market machineries. Thats why under perfect competition
government interference is ignored.

5) PERFECT KNOWLEDGE FOR THE BUYERS AND

SELLERS :-
Buyers and Sellers have good knowledge regarding the market
conditions. The buyers know the “ruling price and does not
offer a higher price on the other hand “. The sellers are aware of
the preventing price in the market.
6)  OFFER FREE ENTRY AND EXIT FOR FIRMS :-
Perfect competition is characterized by the freedom of entry &
exit of firms, that is an existing firm can leave the industry.
Whenever it desire and a new firm can enter the industry
whenever it wishes.

7)  RATIONAL BEHAVIOUR :-
Under the market the seller and the buyers behave rationally,
that is producers produce to get maximum profit while the
consumers demand to get maximum satisfaction.

8)  SINGLE UNIFORM PRICE :-

Under the perfect competition, uniform price prevail. Price is
determined by the inter selection of market demand and
market supply.
 MONOPOLY
• MEANING:-

• Monopoly is a market situation in which a firm has sole rights over the

productions or sells of the products, and has no competitors in the market

and has no close substitute for his product

• DEFINITION:-

• According to  “monopoly is said to access when one firm is the sole

producer or the seller of the product that has no close substitute. That the

monopolist has control over the market. Mono means one and poly means

seller. The monopolist controls the supply of commodities and thus “He is

a price maker”.
 MONOPOLISTIC COMPETITION

• Monopoly and perfect competition are the pure form which does not exist in
the real world. There is a competition where monopoly and perfect
competition are interlinked. The monopolistic completion refers to a market
organization where many sellers sell similar, but differentiate products to a
large number of buyers which is called monopolistic competition.

• According to MS JOHN ROBINSON, it is called imperfect competition. It

is a market category in which there are many sellers and buyers buying and
selling heterogeneously.