The document discusses various market structures including perfect competition, monopolistic competition, oligopoly, and monopoly. For each market structure, it provides definitions and characteristics. It also includes examples of calculations to determine equilibrium outcomes in cases of profit, loss, or breakeven for representative firms under perfect competition, monopolistic competition, oligopoly, and monopoly market structures.

1. Submitted To: Sir Syed Arshad Hussain
Submitted By: SAAD SHOAIB (FA17-BSAF-0001)
KANTESH (FA17-BSAF-0003)
M.ABDULLAH (FA17-BSAF-0005)
Subject: Microeconomics

3. Perfect competition
 Perfect competition happens when numerous small
firms compete against each other. Firms in a
competitive industry produce the socially optimal
output level at the minimum possible cost per unit.

4. Assumptions
1. Free entry and exit of firms
2. Homogenous product is produced by every firm
3. Large number of buyers and sellers
4. Consumers have perfect knowledge about the
market and are well aware of any changes in the
market. Consumers indulge in rational decision
making

8. Equilibrium In Case Of Loss
( Calculation)
 TR= P x Q
 TR = 60 x 600
 TR = 36000
 TC= AR x Q
 TC= 80 x 600
 TC= 48,000
 profit= TR – TC
 P= 36000 – 48,000
 P= -12000

10. Equilibrium In Case Of Break-even
( Calculation)
 TR= P x Q
 TR =60 x 600
 TR = 36000
 TC= AR x Q
 TC= 60 x 600
 TC= 36000
 profit= TR – TC
 P= 6000 – 36,000
 P= 0

12. Equilibrium In Case Of Profit
( Calculation)
 TR= P x Q
 TR =60 x 600
 TR = 36000
 TC= AR x Q
 TC= 40x 600
 TC= 24000
 profit= TR – TC
 P= 36000 – 24,000
 P=12000

14. Monopolist Competition
 An industry contains many competing firms, each of
which has a similar but at least slightly different
product. Restaurants, for example all serve foods but of
different types and different locations. Production costs
are above what could be achieved if all the firms sold
identical products but consumers benefit from the
varieties.

15. Characteristics Of Monopolist Competition:
 Many Seller
 Free Entry & exists
 Product Differentiation
 Price Taker
 Number of Firm

17. Equilibrium In Case Of Loss
( Calculation)
 TR= P x Q
 TR =3000 x 2( pair shoes)
 TR = 6000
 TC= AR x Q
 TC= 5000 x 2(pair shoes)
 TC= 10,000
 profit= TR – TC
 P= 6000 – 10,000
 P= -4000

19. Equilibrium in case Of Break-Even
( Calculation)
 TR= P x Q
 TR =5000 x 2( pair shoes)
 TR = 10,000
 TC= AR x Q
 TC= 5000 x 2(pair shoes)
 TC= 10,000
 profit= TR – TC
 P= 10,000 – 10,000
 P= 0 (Zero)

21. Equilibrium in case Of Profit
( Calculation)
 TR= P x Q
 TR =5000 x 2( pair shoes)
 TR = 10,000
 TC= AR x Q
 TC= 4000 x 2(pair shoes)
 TC= 8000
 profit= TR – TC
 P= 10,000 – 8000
 P= 2000

24. Oligopoly
 Oligopoly is a market structure in which a small
number of firms has the large majority of market
share. An oligopoly is similar to a monopoly,
except that rather than one firm, two or more firms
dominate the market. There is no precise upper
limit to the number of firms in an oligopoly, but the
number must be low enough that the actions of
one firm significantly impact and influence the
others.

25. Characteristics
 A couple large firms in a specific industries
 Many buyers
 Firms have to predict competitor’s reaction.

28. Equilibrium In Case OF
Losses
 TR= PxQ
 TR=5000x50
 TR=250000
 TC= AC x Q
 TC=7000 x 50
 TC=350000
 P=TR- TC
 P=250000- 350000
 P= -10000

30. Equilibrium In Case OF
Breakeven
 TR= PxQ
 TR=5000x50
 TR=250000
 TC= AC x Q
 TC=5000 x 50
 TC=250000
 P=TR- TC
 P=250000- 250000
 P= 0 ( Zero)

32. Equilibrium In Case OF
Profit
 TR= PxQ
 TR=5000x50
 TR=250000
 TC= AC x Q
 TC=3000 x 50
 TC=150000
 P=TR- TC
 P=250000- 150000
 P=10000

35. Monopoly
A pure monopoly is an industry with a single firm that
produce a product for which there is no close
substitutes and in which significant barriers to entry
prevent other firms from entering the industry to
compete for profits.

36. Monopoly
 Only one firm
 Products are Unique
 Price of product will CONSIDERABLE
 Restriction on entry and exit

40. Equilibrium In Case OF Break-
even
 TR= P x Q
 TR=50 x 20
 TR=1000
 TC= AC x Q
 TC=50 x 20
 TC=1000
 P=TR- TC
 P=1000- 1000
 P=0

42. Equilibrium In Case OF
Profit
 TR= P x Q
 TR=50 x 20
 TR=1000
 TC= AC x Q
 TC=45 x 20
 TC=900
 P=TR- TC
 P=1000- 900
 P=100

44. Equilibrium In Case OF
Loss
 TR= P x Q
 TR=45 x 20
 TR=900
 TC= AC x Q
 TC=50 x 20
 TC=1000
 P=TR- TC
 P=900- 1000
 P=-100