.

3. Gourp E
Members name
• Sidra tul muntha
• Tasmia Amjad
• Humna yassien
• Mahnoor bajwa
• Filza

4. Contents:
• A review of market structure and basic prong models
• Monopoly
• Monopolistic Competition
• Oligopoly
• Perfect Competition
• Price Discrimination/Monopoly of Price Product

5. Market:
• Market refers to the whole region where buyer & seller are in contact
while each other to effect the demand & supply of the commodi
• Features:
• Buyers and sellers
• A product or service
• Bargaining of a price
• Knowledge of Market Condition
• One price For a product or service at a given time.

6. Monopoly:
• The word Monopoly is derived from two Greek words “More” and “Poler Here
Mono stans for single or one and polin stands for seller or producer. So
monopoly means one or single seller.
• Definition:
• “Monopoly is market structure in which single seller controls the whole
supply of a single product which has no close substitute”
• Example:
• Wapda Pakistan Railway etc.

7. Features:
• Single Seller
• Restriction to entity
• NO close substitute
• Barriers for new firms
• Control on Price/ Price maker
• 100% Profit

9. Monopolistic Competition:
• Here there are many selers, offering differentiated products to many buyer
Features:
• Large number of sellers
• Product differentiation
• A Freedom of entry &eixt
• Non-price Competition

10. Oligopoly:
• Where there are a few sellers, selling competitive products to many buyers
• Features:
• Independence
• Importance of Adversing & selling com
• Group behaviour

11. Perfect Competition:
• It is characterized by many sellers, selling identical products to many buyers
• Features:
• Large number of buyers & sellers
• Uniform Price
• Existence of Homogeneous products
• Free entry & exit of firm
• Perfect knowledge

13. Define Price Discrimination:
• Price discrimination is defined as a business charging different consumers
different prices for the same product.
For example:
Higher costs for parcels delivered over short and long-haul distances in the UK
and overseas.

14. Degree of price discrimination:
• 1st degree discrimination
• 2nd degree discrimination
• 3rd degree discrimination
Types of price discrimination:
• Personal
• Geographical
• On the basic of use

15. Personal:
• Price discrimination when different prices are charged from different individuals.
The different prices are charged according to the level of income of consumers as
well as their willingness to purchase a product.
For example:
A doctor charges different fees from poor and rich patients.

16. Geographical:
Price discrimination when the monopolist charges different prices at different
places for the same product. This type of discrimination is also called dumping.
On the basic of use:
Occurs when different prices are charged according to the use of a product.
For instance, an electricity supply board charges lower rates for domestic
consumption of electricity and higher rates for commercial consumption

17. Frist- degree of price discrimination:
• Refers to a price crimination in which a monopolist charges the maximum
price that each buyer is willing to pay. This is also known as perfect price
discrimination as it involves maximum exploitation of consumers. In this,
consumers fail to enjoy any consumer surplus. First degree is practiced by
lawyers and doctors.

18. Second –degree of price discrimination:
• Refers to a price discrimination in which buyers are divided into different
groups and different prices are charged from these groups depending upon
what they are willing to pay. Railways and airlines practice this type of price
discrimination.

19. Third –degree of price discrimination:
• Refers to a price discrimination in which the monopolist divides the entire
market into submarkets and different prices are charged in each submarket.
Therefore, third-degree price discrimination is also termed as market
segmentation.

20. Condition of price discrimination:
Firms must have sufficient monopoly (market) power
• Monopolists always have pricing power-price makers not takers
Identifying different market segments
• consumers with different price elasticities of demand
Ability to separate different groups
• Requires information/sufficient market intelligence
Ability to prevent re-sale (arbitrage)
• No secondary markets where arbitrage can take place at intermediate prices
e.g. Limiting sales, age-restrictions, ID cards.