Classification of markets
Very Short Period
Very Long Period
• A theoretical market structure.
• Competition among sellers and buyers prevails in its
most perfect form.
• Single market price prevails for a commodity.
• The industry that most closely resembles perfect
competition - Agriculture.
Infinite buyers and sellers
Zero entry and exit barriers
Perfect factor mobility
Non-increasing returns to scale
• Simple & convenient form of market to understand.
• Gives a clear insight to how a market economy
• First step in understanding nature of complex forms
of market structure.
• Ideal form of market under normative grounds.
• Introduced by Mrs. Joan Robinson and Chamberlin.
• A type of market that does not operate under the
rigid rules of perfect competition.
• Forms of imperfect competition include monopoly,
duopoly, oligopoly, monopolistic competition.
Market structure in which there are few firms producing
either identical products or differentiated products.
“COMPETITION AMONG FEW”
Lack of uniformity
Lack of certainty
Kinked demand curve
KINKED DEMAND CURVE
• Increase in price - Elastic
• Decrease in price - Inelastic
TYPES OF OLIGOPOLY
• Pure and Differentiated Oligopoly
• Price Leadership
• Operating Systems : Apple, Microsoft.
• Gaming Consoles : Nintendo, Sony, Microsoft.
• Confectioneries : Nestlé, The Hershey Company and Mars.
• Indian Telecommunication : Airtel, Vodafone, Idea, Reliance.
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