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Market Structure and Types of Market Structure


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This presentation is all about market structure and types of it.

Market Structure and Types of Market Structure

  1. 1. Market Structure BY:- Mithilesh Trivedi
  2. 2. What is The market Structure? Those characteristics of the market that significantly affect the behavior and interaction of buyers and sellers.
  3. 3. Things To Be Considered Number and size of sellers and buyers Type of the product Conditions of entry and exit Transparency of information
  4. 4. Types Of Market Structure 1.Pure (perfect) Competition 2.Monopoly 3.Monopolistic Competition 4.Oligopoly
  5. 5. Pure (perfect) Competition Many and small sellers, so that no one can affect the market Homogeneous product Free entry to and exit from the industry Transparent and free information
  6. 6. Curves in Perfect Competition E (Industry:– Price maker) (Firm:-Price takes)
  7. 7. Monopoly 1. A single seller: the firm and industry are synonymous. 2. Unique product: no close substitutes for the firm’s product. 3. The firm is the price maker: the firm has considerable control over the price because it can control the quantity supplied. 4. Entry or exit is blocked.
  8. 8. Curve in Monopoly AC:-Average Cost MC:-Marginal Cost
  9. 9. Monopolistic Competition Multiple firms produce similar products Firms face down sloping demand curves Profit maximization occurs where MC=MR In the limit, firms compete away economic profits
  10. 10. Curve in Monopolistic Competition
  11. 11. Oligopoly  Few large firms: each must consider its rivals’ reactions in response to its decisions about prices, output, and advertising.  Standardized or differentiated products  Entry is hard: economies of scale, huge capital investment may be the barriers to enter.
  12. 12. Curve in Oligopoly Competition