The document outlines the characteristics of a market, emphasizing that it encompasses the interactions of buyers and sellers, rather than being confined to a physical location. It describes different market structures such as perfect competition, monopolistic competition, oligopoly, and monopoly, detailing their attributes like the number of firms and barriers to entry. Key concepts include the determination of price through competition, the need for transparency of information, and the presence of buyers and sellers for market functionality.

2. ‘Those characteristics of the market that
significantly affect the behavior and
interaction of buyers and sellers.’
According to J.C. Edwards, “ A market is
that mechanism by which buyers and
sellers are bought together. It is not
necessarily a fixed place.”

3. Number and size of sellers and buyers
Type of the product
Conditions of entry and exit
Transparency of information

4. (i) An Area:
In economics, a market does not mean a particular place but the
whole region where sellers and buyers of a product ate spread.
Modem modes of communication and transport have made the
market area for a product very wide.
(ii) One Commodity:
In economics, a market is not related to a place but to a particular
product. Hence, there are separate markets for various
commodities. For example, there are separate markets for
clothes, grains, jewellery, etc.

5. (iii) Buyers and Sellers:
The presence of buyers and sellers is necessary for the sale
and purchase of a product in the market.
(iv) Free Competition:
There should be free competition among buyers and sellers
in the market. This competition is in relation to the price
determination of a product among buyers and sellers.
(v) One Price:
The price of a product is the same in the market because of
free competition among buyers and sellers.

7. Perfectly
Competitive
• Less market
power
• Price takers
• Goods are
homogenous
• Free entry and
exit
• Perfect
Information
Monopolistic
Competition
• Many firms
• Free entry and
exit
• Differentiated
but highly
substitutable
product
Oligopoly
• Small number
of firms
• Product
differentiation
may or may
not exist
• Barriers to
entry
Monopoly
• There is market
power
• Single seller
• One product
(limited or no
good
substitutes)
• Barriers to
entry

8. 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

10. 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

12. 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.

13. AC:-Average Cost
MC:-Marginal Cost

14.  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.

16. This Presentation was prepared by
MEETSHAH
Mail id : meet.shah134@gmail.com