Your SlideShare is downloading. ×
0
Competitive markets ppt MBA
Competitive markets ppt MBA
Competitive markets ppt MBA
Competitive markets ppt MBA
Competitive markets ppt MBA
Competitive markets ppt MBA
Competitive markets ppt MBA
Competitive markets ppt MBA
Competitive markets ppt MBA
Competitive markets ppt MBA
Competitive markets ppt MBA
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Competitive markets ppt MBA

503

Published on

Competitive markets ppt @ bec doms bagalkot mba BY BABASAB PATIL

Competitive markets ppt @ bec doms bagalkot mba BY BABASAB PATIL

Published in: Business, Economy & Finance
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
503
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
25
Comments
0
Likes
1
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. COMPETITIVE MARKETS Microeconomics for Business
  • 2. The Perfect Competition Model Sellers are price-takers Sellers do not behave strategically Entry into the market is free Buyers are price-takers
  • 3. Market Structure Large number of buyers Large number of sellers, each with negligible market share Homogeneous products Well informed buyers No barriers to entry ε mkt ε firm = m
  • 4. Short Run Equilibrium Short run market demand is less price elastic than long run A fixed number of firms in the market Firms operating on their short run supply curves Market supply is sum of each firm’s supply
  • 5. Market & Firm Equilibrium (SR) Firm Market SSR£ £ MCSR ACSRP1 P1 C1 DSR x1 Qty X1 Qty
  • 6. Long Run Equilibrium Long run market demand is more price elastic than short run Number of firms in the market is not fixed  new firms can enter (attracted by economic profits)  loss-making firms can leave Firms operating on their long run supply curves
  • 7. Long Run EquilibriumAssume that: All existing and potential new firms have access to same technology and hence face the same costs Input prices remain constant regardless of number of firms in the market: i.e. constant cost industry
  • 8. Market & Firm Equilibrium (LR) Firm Market£ £ MCLR ACLR SLRP* P* DLR x1 Qty X1 Qty
  • 9. Increasing Cost Industry As number of firms in the industry increases, input prices and hence long run average costs rise So long run market supply curve is upward sloping
  • 10. Decreasing Cost Industry As number of firms in the industry increases, input prices and hence long run average costs fall So long run market supply curve is downward sloping
  • 11. Efficiency of Competition

×