The document discusses different market structures: perfect competition, monopoly, monopolistic competition, oligopoly, and duopoly. Perfect competition is characterized by many small firms, homogeneous products, perfect information, and price-taking behavior. Monopoly involves a single seller controlling the market. Monopolistic competition and oligopoly involve a small number of firms with some product differentiation. Oligopoly features mutual interdependence between firms. Duopoly is a special case of oligopoly with two firms.

2. Market
• Market is a place in which buyers
and sellers come into contact for the
purchase and sale of goods and
services.

3. Market structure
• refers to number of firms operating in
an industry, nature of competition
between them and the nature of
product.

4. Types of market
• Perfect competition.
• Monopoly.
• Monopolistic Competition
• Oligopoly.

5. Perfect competition
• It refers to a market situation in
which there are large number of
buyers and sellers. Firms sell
homogeneous products at a uniform
price.

6. perfect competition is a price taker
not a price maker
• A firm under perfect competition is a price
taker not a price maker because the price is
determined by the market forces of demand
of supply. This price is known as
equilibrium price. All the firms in the
industry have to sell their outputs at this
equilibrium price. The reason is that,
number of firms under perfect competition
is so large. So no firm can influence the
price by its supply. All firms produce
homogeneous product.

7. perfect competition is a price taker not
a price maker

8. Demand Curve Under Perfect
Competition
• There are very large numbers of
buyers and sellers selling a
homogeneous product at a price fixed
by the market .
• Therefore, each firm is a price taker
and faces a perfectly elastic demand
curve.

9. Monopoly market
• Monopoly is a market situation
dominated by a single seller who
has full control over the price.

10. Monopolistic competition
• It refers to a market situation in
which there are many firms who
sell closely related but
differentiated products.

11. Demand Curve : Monopolistic
COMPETITION vs MONOPOLY
• The demand curve of monopolistic
competition looks exactly like the demand
curve monopoly as both faces downward
sloping demand curves. However Demand
Curve under monopolistic competition is
more elastic as compared to demand curve
under monopoly. This happens because
differentiated products under
monopolistic competition.

12. Demand Curve : Monopolistic
COMPETITION vs MONOPOLY

13. Oligopoly
• It is a market structure in which
there are few large sellers of a
commodity and large number of
buyers.

14. Duopoly
• It is a special case of oligopoly , in which
there are exactly two sellers.
• Under Duopoly, it is assumed that the
product sold by the two firms is
homogeneous and there is no Substitute for
it.
• E.g., Pepsi and Coca-Cola in the soft drink
market.

15. Features of perfect competition
• Very large number of buyers and sellers.
• Homogeneous product.
• Free entry and exit of firms.
• Perfect knowledge.
• Firm is a price taker and industry is price maker.
• Perfectly elastic demand curve (AR=MR)
• Perfect mobility of factors of production.
• Absence of transportation cost.
• Absence of selling cost.

16. Features of monopoly
• Single seller of a commodity.
• Absence of close substitute of the product.
• Difficulty of entry of a new firm.
• Negatively sloped demand curve(AR>MR)
• Full control over price.
• Price discrimination exists
• Existence of abnormal profit

17. Features of monopolistic
competition
• Large number of buyers and sellers but
less than perfect competition.
• Product differentiation.
• Freedom of entry and exit.
• Selling cost.
• Lack of perfect knowledge.
• High transportation cost.
• Partial control over price.

18. Main features of Oligopoly
• Few dominant firms who are large in
size
• Mutual interdependence.
• Barrier to entry.
• Homogeneous or differentiated
product.
• Price rigidity.

19. Features of pure competition
• Large number of buyers and
sellers.
• Homogeneous products.
• Free entry and exit of firm.