This document provides an overview of market structures and types of markets. It discusses the key features of perfect competition, monopoly, oligopoly, and monopolistic competition. It also describes different types of markets based on geographical area (local, regional, national, world) and time period (very short period, short period, long period, very long period).
1. The document discusses different types of market structures, including perfect competition, monopoly, oligopoly, and monopolistic competition.
2. It defines each type of market structure based on the number of buyers and sellers, product differentiation, barriers to entry, and firms' ability to influence prices.
3. The key characteristics that determine market structure are the number and nature of buyers and sellers, conditions of entry and exit, nature of the product, and economies of scale.
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This document provides an overview of marketing concepts including definitions of marketing, the marketing mix, types of markets, and market structures. It defines marketing as identifying and satisfying consumer demand through a system of activities to plan, price, promote, and distribute goods and services. The marketing mix consists of the 4Ps - product, price, promotion, and place. Markets are classified by type of goods (commodity, input, financial) and structure (perfect competition, monopoly, monopolistic competition, oligopoly). Market structures differ based on the number of sellers, product differentiation, and barriers to entry.
1. A market refers to a situation where buyers and sellers exchange goods and services and the price is determined. Key elements of a market include the presence of buyers, sellers, commodities, and a location for transactions.
2. The extent of a market depends on factors such as the characteristics and demand for the commodity, transportation and communication systems, political stability, and currency/credit systems. Government policies can also impact market size.
3. There are different types of markets including product, factor, and financial markets classified by what is bought and sold, as well as local, national, and international markets classified by location.
1. The document discusses different types of market structures including perfect competition, monopoly, oligopoly, and monopolistic competition.
2. It defines key characteristics of each market structure such as the number of sellers and buyers, product differentiation, and barriers to entry.
3. Examples of different market classifications are provided such as local markets for perishable goods versus national or world markets for mass-produced items.
Marketing touches all aspects of life from birth to death. Modern marketing emerged through different stages - from barter economy to money economy to industrial revolution to current stage of competition. Marketing is defined as the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services. It involves activities like product decisions, pricing, distribution, communication, and research. Marketing plays an important role in business, society and the economy by satisfying needs, improving standards of living, and facilitating exchange.
1. Marketing requires the existence of consumers with wants and producers with products to satisfy those wants.
2. Marketing is a business function that involves creating and delivering value to customers through products and managing relationships to benefit both the business and its stakeholders.
3. Good marketing results from careful planning and execution of marketing processes rather than by accident.
1. The document discusses different types of market structures, including perfect competition, monopoly, oligopoly, and monopolistic competition.
2. It defines each type of market structure based on the number of buyers and sellers, product differentiation, barriers to entry, and firms' ability to influence prices.
3. The key characteristics that determine market structure are the number and nature of buyers and sellers, conditions of entry and exit, nature of the product, and economies of scale.
CA NOTES ON MARKETS IN BUSINESS ECONOMICS
FREE AFFIDAVITS AND NOTICES FORMATS
FREE AGREEMENTS AND CONTRACTS FORMATS
FREE LLB LAW NOTES
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FREE LLB LAW FIRST SEM NOTES
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FREE CA ICWA FOUNDATION NOTES
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KANOON KE RAKHWALE INDIA
HIRE LAWYER ONLINE
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VISIT : https://www.kanoonkerakhwale.com/
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This document provides an overview of marketing concepts including definitions of marketing, the marketing mix, types of markets, and market structures. It defines marketing as identifying and satisfying consumer demand through a system of activities to plan, price, promote, and distribute goods and services. The marketing mix consists of the 4Ps - product, price, promotion, and place. Markets are classified by type of goods (commodity, input, financial) and structure (perfect competition, monopoly, monopolistic competition, oligopoly). Market structures differ based on the number of sellers, product differentiation, and barriers to entry.
1. A market refers to a situation where buyers and sellers exchange goods and services and the price is determined. Key elements of a market include the presence of buyers, sellers, commodities, and a location for transactions.
2. The extent of a market depends on factors such as the characteristics and demand for the commodity, transportation and communication systems, political stability, and currency/credit systems. Government policies can also impact market size.
3. There are different types of markets including product, factor, and financial markets classified by what is bought and sold, as well as local, national, and international markets classified by location.
1. The document discusses different types of market structures including perfect competition, monopoly, oligopoly, and monopolistic competition.
2. It defines key characteristics of each market structure such as the number of sellers and buyers, product differentiation, and barriers to entry.
3. Examples of different market classifications are provided such as local markets for perishable goods versus national or world markets for mass-produced items.
Marketing touches all aspects of life from birth to death. Modern marketing emerged through different stages - from barter economy to money economy to industrial revolution to current stage of competition. Marketing is defined as the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services. It involves activities like product decisions, pricing, distribution, communication, and research. Marketing plays an important role in business, society and the economy by satisfying needs, improving standards of living, and facilitating exchange.
1. Marketing requires the existence of consumers with wants and producers with products to satisfy those wants.
2. Marketing is a business function that involves creating and delivering value to customers through products and managing relationships to benefit both the business and its stakeholders.
3. Good marketing results from careful planning and execution of marketing processes rather than by accident.
Markets exist where buyers and sellers can exchange goods and services. The key conditions for a market are the existence of commodities, buyers, sellers, prices, and competition. Markets can be classified in various ways, including by the types of goods exchanged, the geographical location of buyers and sellers, the types of buyers and sellers, and whether exchanges occur immediately or in the future. Well-functioning markets facilitate transactions, connect buyers and sellers, stabilize prices, and motivate production.
Analysis of turbulent market environmentsumesh yadav
This document provides an overview of different market structures including perfect competition, monopoly, monopolistic competition, and oligopoly. It discusses the key characteristics of each market structure, such as the number of firms, product differentiation, barriers to entry, and firm behavior. Perfect competition is defined as a market with many small firms, identical products, perfect information and free entry and exit. Monopoly is a market with a single firm and significant barriers to entry. Monopolistic competition features many firms, differentiated products, and free entry. Oligopoly involves a small number of large firms producing either homogeneous or differentiated products.
This document discusses different market structures. It begins by defining market structure and its key characteristics. It then lists the four major market structures: perfect competition, monopoly, oligopoly, and monopolistic competition. For each structure, it provides examples and discusses key assumptions. It also outlines factors that determine a market's structure and provides definitions for different models of market structures, including their main assumptions.
International Journal of Humanities and Social Science Invention (IJHSSI) is an international journal intended for professionals and researchers in all fields of Humanities and Social Science. IJHSSI publishes research articles and reviews within the whole field Humanities and Social Science, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
This document discusses different forms of market structure in economics. It begins by defining a market and outlining its key features. It then explains the different forms of market structure: perfect competition, monopoly, monopolistic competition, and oligopoly. For each form of market, the document outlines the defining characteristics and provides examples. It compares the different forms based on factors such as the number of firms, ease of entry/exit, degree of product differentiation, and shape of the demand curve. The goal is to help students understand the different market structures and how they compare to one another.
Market1 13360310399641-phpapp02-120503024734-phpapp02Sreious John
This document provides an overview of market structures and definitions. It discusses the key features of perfect competition, including many buyers and sellers, homogeneous products, and firms being price takers. It also describes monopoly, oligopoly, and monopolistic competition. For each market structure, it outlines the number of firms, product differentiation, entry/exit barriers, and interdependence between firms. The document also discusses how individual firms determine price and output in the short run and long run under perfect competition.
The document discusses different market structures including perfect competition, monopoly, monopolistic competition, oligopoly, and duopoly. It describes the key characteristics of each structure such as the number of firms, level of control over price, barriers to entry/exit, product homogeneity, and interdependence between firms. Perfect competition has many small firms, identical products, free entry/exit and firms are price takers. A monopoly is dominated by a single firm. Oligopoly and duopoly are dominated by a small number of large firms where their actions influence each other.
This document provides an overview of market structure and the different types of market structures. It discusses the key factors used to classify market structures, including the number of buyers and sellers, product differentiation, barriers to entry and exit, and level of competition. It then describes the characteristics of four main market structures: perfect competition, monopoly, monopolistic competition, and oligopoly. The document compares the differences between these market structures and provides examples of each. It also discusses price determination in markets and the concept of equilibrium price.
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This document discusses market structure and its components. It defines market structure as the characteristics of a market that influence how buyers and sellers interact and behave. The key components of market structure are the number of buyers and sellers, type of product, conditions of entry and exit, and availability of information. The main types of market structure discussed are perfect competition, monopoly, oligopoly, and monopolistic competition. Perfect competition has many buyers and sellers and a homogeneous product. A monopoly has a single seller. Oligopoly and monopolistic competition are forms of imperfect competition that deviate from perfect competition.
The document defines different types of markets and provides examples of each. It discusses physical markets where buyers and sellers interact in person, virtual markets where interaction occurs online, and auction markets where goods are sold to the highest bidder. It also outlines consumer markets for personal goods, industrial markets for business-to-business sales, black markets for illegal goods, and financial markets for trading financial instruments. The document then examines different market structures including perfect competition, monopolistic competition, monopoly, and oligopoly.
Types of markets and their characteristics.Binjal Patel
1) The document discusses different types of market systems including monopoly, oligopoly, monopolistic competition, perfect competition, and monopsony.
2) A monopoly is characterized by a single seller, while an oligopoly has a small number of dominant sellers. Monopolistic competition involves differentiated products.
3) Perfect competition assumes many buyers and sellers such that no individual participant can influence the market price. A monopsony has a single buyer who can influence the price paid to suppliers.
A market is defined as a place where buyers and sellers engage in transactions of various products. The structure of a market determines the price and level of production in that market. There are four main types of market structures: perfect competition, monopoly, monopolistic competition, and oligopoly. Under perfect competition, there are many small firms and buyers/sellers, products are homogeneous, there is free entry and exit into the market, and prices are determined by supply and demand forces.
This document discusses various ways that agricultural markets can be classified or categorized. It describes 12 different dimensions by which markets are commonly differentiated, such as by location, area covered, time span, volume of transactions, degree of competition, and more. For each dimension, it provides examples of the types of markets that would fall under each classification. The document serves as a comprehensive overview of the framework by which agricultural markets are studied and analyzed.
The document provides an overview of perfect competition in microeconomics. It uses the example of a catfish farmer named Joe to illustrate the production decision-making process of a perfectly competitive firm. Joe faces a horizontal demand curve and is a price taker, meaning he must sell his product at the market price. The document analyzes Joe's marginal revenue and marginal cost data to determine that his profit-maximizing output is 9 units, which will provide a profit of $299. It emphasizes that perfectly competitive firms will produce the output where marginal revenue equals marginal cost to maximize profits.
The document discusses different types of markets, including monopoly, perfect competition, wholesale, and retail markets. It defines a market as an arrangement where buyers and sellers interact directly or indirectly to buy and sell goods. A monopoly exists when there is a single seller of a unique product with no close substitutes. Perfect competition exists when many small firms sell homogeneous products with free entry and exit into the market. Wholesale markets involve the sale of goods in large quantities to retailers, while retail markets involve the sale of goods in small quantities directly to consumers. Online markets allow consumers to directly purchase goods or services from sellers over the internet.
The document defines key terms related to market structure and perfect competition, including marginal cost, marginal revenue, total cost, and total revenue. It then outlines the characteristics of a perfectly competitive market: many buyers and sellers so that no single participant can influence prices; identical products being sold; buyers and sellers having perfect information; and easy entry and exit into the market. Perfect competition results in the market determining prices based on supply and demand forces.
This document discusses different types of markets. It defines a market as identifying and satisfying customer wants profitably. There are four main types of markets: perfect competition, where many small firms produce the same standardized product; monopolistic competition, where many firms make similar but differentiated products; oligopoly, where a few large firms dominate the market due to barriers to entry and economies of scale; and monopoly, where only one firm controls the market. Each market type exhibits different characteristics in terms of competition and firm behavior.
The document discusses different market structures including perfect competition, monopoly, oligopoly, monopolistic competition, and monopsony. It provides characteristics and assumptions of each structure. Perfect competition has many small firms and homogeneous products. A monopoly has one dominant firm with high barriers to entry. Oligopoly has a few dominant firms producing either homogeneous or differentiated products. Monopolistic competition has many small firms with differentiated but substitutable products. Monopsony exists when there is a single dominant buyer in a market with many suppliers.
1. The document discusses different types of market structures, including perfect competition, monopoly, oligopoly, and monopolistic competition.
2. It defines each type of market structure based on the number of buyers and sellers, level of competition, product differentiation, and other factors.
3. The key types of market structures discussed are perfect competition, monopoly, oligopoly, and monopolistic competition.
This document provides an introduction and overview of marketing and its environment. It discusses key concepts including the definition of a market and different types of markets that can be classified based on geographical area, nature of transactions, position of sellers, commodities traded, nature of competition, and volume of business. It also outlines four key customer markets: consumer markets, business markets, global markets, and non-profit and government markets. The learning objectives are to understand basic marketing concepts, the marketing environment and analysis, and marketing plans, implementation and control.
Markets exist where buyers and sellers can exchange goods and services. The key conditions for a market are the existence of commodities, buyers, sellers, prices, and competition. Markets can be classified in various ways, including by the types of goods exchanged, the geographical location of buyers and sellers, the types of buyers and sellers, and whether exchanges occur immediately or in the future. Well-functioning markets facilitate transactions, connect buyers and sellers, stabilize prices, and motivate production.
Analysis of turbulent market environmentsumesh yadav
This document provides an overview of different market structures including perfect competition, monopoly, monopolistic competition, and oligopoly. It discusses the key characteristics of each market structure, such as the number of firms, product differentiation, barriers to entry, and firm behavior. Perfect competition is defined as a market with many small firms, identical products, perfect information and free entry and exit. Monopoly is a market with a single firm and significant barriers to entry. Monopolistic competition features many firms, differentiated products, and free entry. Oligopoly involves a small number of large firms producing either homogeneous or differentiated products.
This document discusses different market structures. It begins by defining market structure and its key characteristics. It then lists the four major market structures: perfect competition, monopoly, oligopoly, and monopolistic competition. For each structure, it provides examples and discusses key assumptions. It also outlines factors that determine a market's structure and provides definitions for different models of market structures, including their main assumptions.
International Journal of Humanities and Social Science Invention (IJHSSI) is an international journal intended for professionals and researchers in all fields of Humanities and Social Science. IJHSSI publishes research articles and reviews within the whole field Humanities and Social Science, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
This document discusses different forms of market structure in economics. It begins by defining a market and outlining its key features. It then explains the different forms of market structure: perfect competition, monopoly, monopolistic competition, and oligopoly. For each form of market, the document outlines the defining characteristics and provides examples. It compares the different forms based on factors such as the number of firms, ease of entry/exit, degree of product differentiation, and shape of the demand curve. The goal is to help students understand the different market structures and how they compare to one another.
Market1 13360310399641-phpapp02-120503024734-phpapp02Sreious John
This document provides an overview of market structures and definitions. It discusses the key features of perfect competition, including many buyers and sellers, homogeneous products, and firms being price takers. It also describes monopoly, oligopoly, and monopolistic competition. For each market structure, it outlines the number of firms, product differentiation, entry/exit barriers, and interdependence between firms. The document also discusses how individual firms determine price and output in the short run and long run under perfect competition.
The document discusses different market structures including perfect competition, monopoly, monopolistic competition, oligopoly, and duopoly. It describes the key characteristics of each structure such as the number of firms, level of control over price, barriers to entry/exit, product homogeneity, and interdependence between firms. Perfect competition has many small firms, identical products, free entry/exit and firms are price takers. A monopoly is dominated by a single firm. Oligopoly and duopoly are dominated by a small number of large firms where their actions influence each other.
This document provides an overview of market structure and the different types of market structures. It discusses the key factors used to classify market structures, including the number of buyers and sellers, product differentiation, barriers to entry and exit, and level of competition. It then describes the characteristics of four main market structures: perfect competition, monopoly, monopolistic competition, and oligopoly. The document compares the differences between these market structures and provides examples of each. It also discusses price determination in markets and the concept of equilibrium price.
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KANOON KE RAKHWALE INDIA
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This document discusses market structure and its components. It defines market structure as the characteristics of a market that influence how buyers and sellers interact and behave. The key components of market structure are the number of buyers and sellers, type of product, conditions of entry and exit, and availability of information. The main types of market structure discussed are perfect competition, monopoly, oligopoly, and monopolistic competition. Perfect competition has many buyers and sellers and a homogeneous product. A monopoly has a single seller. Oligopoly and monopolistic competition are forms of imperfect competition that deviate from perfect competition.
The document defines different types of markets and provides examples of each. It discusses physical markets where buyers and sellers interact in person, virtual markets where interaction occurs online, and auction markets where goods are sold to the highest bidder. It also outlines consumer markets for personal goods, industrial markets for business-to-business sales, black markets for illegal goods, and financial markets for trading financial instruments. The document then examines different market structures including perfect competition, monopolistic competition, monopoly, and oligopoly.
Types of markets and their characteristics.Binjal Patel
1) The document discusses different types of market systems including monopoly, oligopoly, monopolistic competition, perfect competition, and monopsony.
2) A monopoly is characterized by a single seller, while an oligopoly has a small number of dominant sellers. Monopolistic competition involves differentiated products.
3) Perfect competition assumes many buyers and sellers such that no individual participant can influence the market price. A monopsony has a single buyer who can influence the price paid to suppliers.
A market is defined as a place where buyers and sellers engage in transactions of various products. The structure of a market determines the price and level of production in that market. There are four main types of market structures: perfect competition, monopoly, monopolistic competition, and oligopoly. Under perfect competition, there are many small firms and buyers/sellers, products are homogeneous, there is free entry and exit into the market, and prices are determined by supply and demand forces.
This document discusses various ways that agricultural markets can be classified or categorized. It describes 12 different dimensions by which markets are commonly differentiated, such as by location, area covered, time span, volume of transactions, degree of competition, and more. For each dimension, it provides examples of the types of markets that would fall under each classification. The document serves as a comprehensive overview of the framework by which agricultural markets are studied and analyzed.
The document provides an overview of perfect competition in microeconomics. It uses the example of a catfish farmer named Joe to illustrate the production decision-making process of a perfectly competitive firm. Joe faces a horizontal demand curve and is a price taker, meaning he must sell his product at the market price. The document analyzes Joe's marginal revenue and marginal cost data to determine that his profit-maximizing output is 9 units, which will provide a profit of $299. It emphasizes that perfectly competitive firms will produce the output where marginal revenue equals marginal cost to maximize profits.
The document discusses different types of markets, including monopoly, perfect competition, wholesale, and retail markets. It defines a market as an arrangement where buyers and sellers interact directly or indirectly to buy and sell goods. A monopoly exists when there is a single seller of a unique product with no close substitutes. Perfect competition exists when many small firms sell homogeneous products with free entry and exit into the market. Wholesale markets involve the sale of goods in large quantities to retailers, while retail markets involve the sale of goods in small quantities directly to consumers. Online markets allow consumers to directly purchase goods or services from sellers over the internet.
The document defines key terms related to market structure and perfect competition, including marginal cost, marginal revenue, total cost, and total revenue. It then outlines the characteristics of a perfectly competitive market: many buyers and sellers so that no single participant can influence prices; identical products being sold; buyers and sellers having perfect information; and easy entry and exit into the market. Perfect competition results in the market determining prices based on supply and demand forces.
This document discusses different types of markets. It defines a market as identifying and satisfying customer wants profitably. There are four main types of markets: perfect competition, where many small firms produce the same standardized product; monopolistic competition, where many firms make similar but differentiated products; oligopoly, where a few large firms dominate the market due to barriers to entry and economies of scale; and monopoly, where only one firm controls the market. Each market type exhibits different characteristics in terms of competition and firm behavior.
The document discusses different market structures including perfect competition, monopoly, oligopoly, monopolistic competition, and monopsony. It provides characteristics and assumptions of each structure. Perfect competition has many small firms and homogeneous products. A monopoly has one dominant firm with high barriers to entry. Oligopoly has a few dominant firms producing either homogeneous or differentiated products. Monopolistic competition has many small firms with differentiated but substitutable products. Monopsony exists when there is a single dominant buyer in a market with many suppliers.
1. The document discusses different types of market structures, including perfect competition, monopoly, oligopoly, and monopolistic competition.
2. It defines each type of market structure based on the number of buyers and sellers, level of competition, product differentiation, and other factors.
3. The key types of market structures discussed are perfect competition, monopoly, oligopoly, and monopolistic competition.
This document provides an introduction and overview of marketing and its environment. It discusses key concepts including the definition of a market and different types of markets that can be classified based on geographical area, nature of transactions, position of sellers, commodities traded, nature of competition, and volume of business. It also outlines four key customer markets: consumer markets, business markets, global markets, and non-profit and government markets. The learning objectives are to understand basic marketing concepts, the marketing environment and analysis, and marketing plans, implementation and control.
This document provides an agenda and overview for a presentation on markets and marketing. It includes definitions of key terms like market and marketing. It describes 5 concepts in marketing: production, product, selling, marketing, and societal marketing concepts. It outlines several approaches to marketing like product, institutional, functional, management, and system approaches. It also discusses factors that influence the marketing concept like growth of population, changing family concepts, and urbanization. Finally, it outlines the importance of marketing for societies and consumers, organizations, and factors influencing marketing decisions.
This document provides an agenda and overview for a presentation on markets and marketing. It includes definitions of key terms like market and marketing. It describes 5 concepts in marketing: production, product, selling, marketing, and societal marketing concepts. It outlines the importance of marketing for society/consumers and organizations. It also discusses different approaches to marketing like product, institutional, functional, management, and system approaches. Finally, it lists factors that influence the marketing concept such as growth of population, changing family concepts, and urbanization.
This document provides an overview of price determination under perfect competition. It defines key terms like market, market structure, and perfect competition. Under perfect competition, there are many small producers and consumers of homogeneous products, free entry and exit into the market, and perfect information. Equilibrium price is determined by the intersection of supply and demand where quantity supplied equals quantity demanded. In both the short run and long run, firms earn only normal profits under perfect competition.
- A market is a place that enables buyers and sellers to interact and exchange goods and services. The elements of a market include buyers, sellers, goods/services, price, money, and a defined area.
- Market structure depends on the number of buyers/firms, product type, entry barriers, and is characterized as perfect competition, monopolistic competition, oligopoly, or monopoly.
- Perfect competition has many small firms/buyers, homogeneous products, no entry barriers, and price-taking firms. Monopoly has a single firm, a unique product, and high entry barriers, allowing price-setting behavior.
The document discusses different types of markets. It defines a market as a place where buyers and sellers meet to exchange goods and services. Key requirements for a market include multiple buyers and sellers dealing in similar commodities, and a established price. Markets can be classified by area (local, national, international), time period (very short, short, long run), and level of competition (perfect competition, monopoly, oligopoly, monopolistic competition). Under perfect competition, large numbers of small firms produce identical goods, act as price takers, and earn only normal profits in long run equilibrium. A monopoly is dominated by a single seller with barriers to entry and no close substitutes for its product. It can influence prices and output levels
This document discusses different types of market structures. It begins with an introduction to market structure and its importance in understanding market behavior and firm outcomes. It then defines four main types of market structures: perfect competition, monopolistic competition, monopoly, and oligopoly. For each type, it provides examples and discusses key characteristics such as the number of firms, level of differentiation, barriers to entry/exit, and firm control over pricing. The document aims to outline the theoretical frameworks for different market structures and their real-world applications.
This document provides lecture notes on agricultural marketing. It begins with definitions of market, marketing, and agricultural marketing. It describes the key components of a market as well as the dimensions and structure of markets. Market structure includes factors like concentration, product differentiation, entry conditions, and information flow. Market structure influences market conduct and performance. The document then discusses the meaning, objectives, and scope of agricultural marketing. It highlights differences between agricultural and manufactured goods in terms of perishability, seasonality, bulkiness, quality variation, and irregular supply.
This document discusses marketing concepts including marketing mix, marketing functions, storage and warehousing, and logistics management. It defines marketing mix as the combination of product, price, place, and promotion. Marketing functions are classified into exchange functions, physical supply functions, and facilitating functions. Storage and warehousing are described as important physical supply functions, with warehouses providing specialized storage and additional functions. Logistics management is defined as strategically managing the movement and storage of materials from suppliers to consumers.
This document provides an overview of different market structures: pure competition, pure monopoly, monopolistic competition, and oligopoly. It defines each structure and discusses their key characteristics. Pure competition is characterized by many small sellers, homogeneous products, perfect information and mobility. A pure monopoly has a single seller, large barriers to entry, and wields substantial influence over prices. Monopolistic competition involves many sellers of differentiated products. Oligopoly is dominated by a small number of interdependent firms. The document also outlines the assumptions of each market structure model and provides examples.
The document discusses different types of markets based on various factors such as area, nature of transactions, volume of business, time period, status of sellers, level of regulation, competition, number of buyers and sellers, and product characteristics. The key market structures described are perfect competition, monopoly, monopolistic competition, and oligopoly. Perfect competition is characterized by many small sellers and buyers, homogeneous products, and no barriers to entry or exit. A monopoly has a single seller and significant barriers to entry without close substitutes. Monopolistic competition has many sellers but differentiated products. Oligopoly has a few dominant sellers producing either homogeneous or differentiated goods.
A market is where buyers and sellers can meet to potentially transact the buying and selling of goods and services. In economics, a market refers not to a physical place but to the interactions between buyers and sellers of a particular commodity. Markets can be classified based on their geographic scope (local, national, international), time period of supply adjustment (very short, short, long, very long), and degree of competition (perfect competition, monopoly, duopoly, oligopoly, monopsony, monopolistic competition). A perfectly competitive market has many small buyers and sellers of identical goods, free entry and exit of firms, and prices determined by supply and demand.
This document discusses concepts related to agricultural marketing. It defines agriculture, marketing, and agricultural marketing. It outlines objectives of studying agricultural marketing such as understanding complexities to provide efficient services and ensuring an efficient system benefits all. The document also covers scope and subject matter, differences between agricultural and manufactured products, importance of agricultural marketing, components and dimensions of markets, and relationships between market structure, conduct, and performance.
There are four common types of Market in marketing: Consumer market, Business market, Global market and Non-profit/government market. Find out in detail from this presentation what a market is and a description of the various types of market.
This document discusses different market structures: perfect competition, imperfect competition (monopolistic competition, oligopoly, monopoly).
Perfect competition has many small buyers and sellers of homogeneous products with perfect information. Imperfect competition has some but not all features of perfect competition, such as product differentiation.
Monopolistic competition has many firms selling differentiated products. Oligopoly has a few dominant firms selling homogeneous or differentiated products. Monopoly has a single seller of unique products without close substitutes.
The document outlines key characteristics of each market structure and how they impact prices, competition, and market outcomes compared to perfect competition.
This document discusses perfect competition in markets. It defines a perfectly competitive market as one with many potential buyers and sellers, homogeneous products, and prices determined by market forces alone. Firms in a perfectly competitive market are price takers and will enter or exit the market in response to profits and losses. The key characteristics of a perfectly competitive market include free entry and exit, perfect information, and mobility of resources.
The document provides an overview of the insurance market in India. It notes that India ranks 11th in the global life insurance business and 21st in the non-life insurance market. Both the life and non-life insurance premium markets have grown rapidly in recent years at a CAGR of 14% and 16.3% respectively. The market share of private sector companies in non-life insurance has increased from 9.6% to 41% over the period FY03 to FY16. Crop, health and motor insurance are expected to drive future market growth.
This document contains the notes on marketing management from Sanjeev Kumar Singh, an assistant professor. It includes 16 questions and answers on topics related to the nature and scope of marketing management, the various marketing orientations adopted by firms, the differences between marketing and selling, the marketing environment, marketing challenges in a global context, factors influencing buying behavior, consumer and industrial buying decision processes, types of consumer buying decisions, differences between organizational and household buying, the Consumer Protection Act of 1986, target marketing strategies, market segmentation, differences between market aggregation and segmentation, differences between consumer and industrial markets, and bases for identifying target customers.
The document summarizes key highlights from the Union Budget 2015 in India. It covers 10 areas: 1) Taxation, 2) Agriculture, 3) Infrastructure, 4) Education, 5) Defence, 6) Welfare Schemes, 7) Renewable Energy, 8) Tourism, 9) Gold, and 10) Financial Sector. Some major points include reducing the corporate tax rate, increasing rural infrastructure funding, allocating more funds for education and defence, expanding welfare programs, and setting renewable energy targets.
Money originated from barter systems and metals and now each country has its own currency to facilitate transactions. Money has static functions like being a medium of exchange and unit of account, and dynamic functions like determining economic trends and consumption. Money is classified based on physical form, acceptability, money of account versus money proper, and types including commodity, fiat, credit, and digital. A country's money supply includes currencies and various deposits. The Reserve Bank of India uses credit control methods like quantitative and qualitative tools to monitor money supply and support economic development and stability.
This document discusses economic policies in India, including fiscal policy and monetary policy. It defines fiscal policy as the government's policy on public revenue, expenditure, and debt. The objectives of fiscal policy are to maintain economic stability and attain full employment. Monetary policy refers to measures to control money supply and achieve economic goals. The tools of monetary policy include bank rate, open market operations, and cash reserve ratio. Both quantitative and qualitative instruments are used to influence the quantity and allocation of credit in the economy.
Globalization refers to the integration of economies across the world through increased economic, political, and cultural exchanges enabled by advances in communication, transport, and infrastructure. Some key features of globalization include a borderless world, sharing of information and technology, growth of commercialization and international cooperation. Globalization allows firms to access new markets but also faces barriers from government policies, high costs, and trade barriers. The document then discusses foreign trade, its characteristics and types, and India's trends in exports and imports. It provides an introduction to the World Trade Organization, its objectives and rules, and impacts on India and its industries.
Foreign direct investment (FDI) brings money into a country from foreign companies to invest in things like factories, infrastructure, or services. FDI is important because it brings new jobs, technology, skills, and improves quality and competitiveness. The key factors that influence FDI include market size, political stability, infrastructure, labor skills, and export potential. Major sectors that attract FDI in India include retail, infrastructure, pharmaceuticals, insurance, banking, and automobiles. However, infrastructure sometimes faces challenges from political influence and delays in approvals between departments.
Module 6 4 textile and other industriesIndependent
The document provides an analysis of several key industries in India, including textiles, electronics, automobiles, FMCG, telecom, and pharmaceuticals. It summarizes the textile industry, noting that it is one of India's oldest and largest industries, and contributes significantly to GDP and exports. It also faces issues like outdated machinery, competition, and government controls. Similarly, it outlines factors like technology changes, competition, materials, and policies that influence the electronics, automobiles, and other industries. Across all industries, it identifies the five forces of industry analysis: threats from new entrants, supplier bargaining power, buyer bargaining power, substitution threats, and competitive rivalry.
Module 6 3 private sector, ssi and industry analysisIndependent
The document discusses the growth of the private sector in India and analyzes small-scale industries and industrial sectors. It notes that trade and investment policies have encouraged growth in telecom, transport, and energy sectors. It also outlines some problems private players face, like focusing only on profitable sectors. Small-scale industries are noted as playing a vital role by generating employment and utilizing local resources. Porter's Five Forces model for industry analysis is introduced as assessing the threat of new entrants, bargaining powers of suppliers and customers, threat of substitutes, and competitive rivalry.
The 1991 Industrial Policy in India aimed to liberalize and integrate the economy by removing unnecessary bureaucratic controls. It abolished industrial licensing, diluted the role of public sector enterprises, removed limits on dominant firms under the MRTP Act, and encouraged foreign direct investment and technology transfers. The policy's goals were to improve efficiency, competitiveness, and modernize Indian industries for globalization. However, it also had limitations like dominance of foreign firms, risks of inferior technology, and social issues around employment.
Module 6 1 - efm - industrial policies and structureIndependent
The document classifies industries based on ownership into five categories: public enterprises, joint sectors, private enterprises, service sector, and cooperative societies. It describes the key features of each category including advantages and disadvantages. Public enterprises are fully owned and controlled by the government, while private enterprises are established and operated by private individuals. Joint sectors involve a partnership between government and private entities. The service sector produces services rather than goods. Cooperative societies are voluntary associations formed to meet common economic and social needs.
The document provides information on business cycles, inflation, price indices, and a SWOT analysis of the Indian economy. It defines business cycles as alternating periods of economic expansion and contraction. There are typically four phases in a business cycle: expansion, peak, contraction, and trough. Causes of business cycles include under/over consumption, innovations, and natural disasters. Inflation is defined as a persistent rise in general price levels. Price indices measure changes in prices between periods. The SWOT analysis identifies strengths like agriculture and skilled workforce, weaknesses like population growth and literacy, opportunities in infrastructure and FDI, and threats like global recession and growing inflation.
National income refers to the total value of all final goods and services produced within a country in a given period of time, usually one year. There are three main approaches to measuring national income: the production or output approach, the expenditure approach, and the income approach. The key measures of national income are Gross National Product (GNP), Gross Domestic Product (GDP), and Net National Product (NNP). GNP is the total market value of all final goods and services produced domestically and abroad by a country's citizens and companies in a year. GDP is similar but excludes income earned abroad. NNP is GNP minus depreciation.
1. The document provides an overview of the Indian economy, including key economic indicators and statistics from 2015.
2. It outlines the structure and characteristics of the Indian economy, such as its developing status, agricultural base, and economic reforms since the 1990s that have liberalized the economy.
3. The economic reforms have transformed India into one of the fastest growing economies in the world with an average growth rate of 7% over the past two decades.
This document discusses profit analysis and break-even analysis. It defines accounting profit and economic profit, explaining that economic profit includes both explicit and implicit costs. Short-run profit is maximized using fixed inputs, while long-run profit allows variable inputs to change. Break-even analysis determines the sales volume needed for total revenue to equal total costs. The key components of profit analysis and assumptions of break-even analysis are described. Approaches to measuring profits and uses of break-even analysis are also summarized.
This document defines key concepts related to production analysis, including:
1. Production functions relate inputs like labor, capital, and technology to the quantity of output. They show the technical relationship between inputs and maximum possible output.
2. The law of diminishing marginal returns states that adding more of one variable input, while holding other inputs fixed, will eventually result in smaller increases in output.
3. Total, average, and marginal product are used to analyze how output changes with variable inputs. Total product is total output. Average product is total output divided by the input. Marginal product is the change in total output from an extra unit of input.
This document provides model question bank solutions for Managerial Economics. It covers key concepts like demand, elasticity of demand, and the responsibilities of a managerial economist. Specifically:
1. It defines demand, derived demand, and income elasticity of demand.
2. It states that a managerial economist is responsible for achieving organizational objectives with limited resources and optimizing resource use.
3. It describes the nature and scope of managerial economics, including its relationship to microeconomics, its normative approach, and its focus on aiding management decisions.
The document discusses the process of forming a public limited company in India. It involves four main stages: 1) promotion, 2) incorporation, 3) capital subscription, and 4) commencement of business. The promotion stage involves organizing the company and drafting required documents. Incorporation requires registering the company with the registrar. For a public company, the capital subscription stage involves issuing a prospectus and raising minimum capital. Finally, a certificate to commence business must be obtained from the registrar before the company can begin operations. Private companies can begin business immediately after incorporation.
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This document provides an overview of wound healing, its functions, stages, mechanisms, factors affecting it, and complications.
A wound is a break in the integrity of the skin or tissues, which may be associated with disruption of the structure and function.
Healing is the body’s response to injury in an attempt to restore normal structure and functions.
Healing can occur in two ways: Regeneration and Repair
There are 4 phases of wound healing: hemostasis, inflammation, proliferation, and remodeling. This document also describes the mechanism of wound healing. Factors that affect healing include infection, uncontrolled diabetes, poor nutrition, age, anemia, the presence of foreign bodies, etc.
Complications of wound healing like infection, hyperpigmentation of scar, contractures, and keloid formation.
This presentation includes basic of PCOS their pathology and treatment and also Ayurveda correlation of PCOS and Ayurvedic line of treatment mentioned in classics.
Strategies for Effective Upskilling is a presentation by Chinwendu Peace in a Your Skill Boost Masterclass organisation by the Excellence Foundation for South Sudan on 08th and 09th June 2024 from 1 PM to 3 PM on each day.
Chapter wise All Notes of First year Basic Civil Engineering.pptxDenish Jangid
Chapter wise All Notes of First year Basic Civil Engineering
Syllabus
Chapter-1
Introduction to objective, scope and outcome the subject
Chapter 2
Introduction: Scope and Specialization of Civil Engineering, Role of civil Engineer in Society, Impact of infrastructural development on economy of country.
Chapter 3
Surveying: Object Principles & Types of Surveying; Site Plans, Plans & Maps; Scales & Unit of different Measurements.
Linear Measurements: Instruments used. Linear Measurement by Tape, Ranging out Survey Lines and overcoming Obstructions; Measurements on sloping ground; Tape corrections, conventional symbols. Angular Measurements: Instruments used; Introduction to Compass Surveying, Bearings and Longitude & Latitude of a Line, Introduction to total station.
Levelling: Instrument used Object of levelling, Methods of levelling in brief, and Contour maps.
Chapter 4
Buildings: Selection of site for Buildings, Layout of Building Plan, Types of buildings, Plinth area, carpet area, floor space index, Introduction to building byelaws, concept of sun light & ventilation. Components of Buildings & their functions, Basic concept of R.C.C., Introduction to types of foundation
Chapter 5
Transportation: Introduction to Transportation Engineering; Traffic and Road Safety: Types and Characteristics of Various Modes of Transportation; Various Road Traffic Signs, Causes of Accidents and Road Safety Measures.
Chapter 6
Environmental Engineering: Environmental Pollution, Environmental Acts and Regulations, Functional Concepts of Ecology, Basics of Species, Biodiversity, Ecosystem, Hydrological Cycle; Chemical Cycles: Carbon, Nitrogen & Phosphorus; Energy Flow in Ecosystems.
Water Pollution: Water Quality standards, Introduction to Treatment & Disposal of Waste Water. Reuse and Saving of Water, Rain Water Harvesting. Solid Waste Management: Classification of Solid Waste, Collection, Transportation and Disposal of Solid. Recycling of Solid Waste: Energy Recovery, Sanitary Landfill, On-Site Sanitation. Air & Noise Pollution: Primary and Secondary air pollutants, Harmful effects of Air Pollution, Control of Air Pollution. . Noise Pollution Harmful Effects of noise pollution, control of noise pollution, Global warming & Climate Change, Ozone depletion, Greenhouse effect
Text Books:
1. Palancharmy, Basic Civil Engineering, McGraw Hill publishers.
2. Satheesh Gopi, Basic Civil Engineering, Pearson Publishers.
3. Ketki Rangwala Dalal, Essentials of Civil Engineering, Charotar Publishing House.
4. BCP, Surveying volume 1
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Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...Dr. Vinod Kumar Kanvaria
Exploiting Artificial Intelligence for Empowering Researchers and Faculty,
International FDP on Fundamentals of Research in Social Sciences
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it describes the bony anatomy including the femoral head , acetabulum, labrum . also discusses the capsule , ligaments . muscle that act on the hip joint and the range of motion are outlined. factors affecting hip joint stability and weight transmission through the joint are summarized.
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An import error occurs when a program fails to import a module or library, disrupting its execution. In languages like Python, this issue arises when the specified module cannot be found or accessed, hindering the program's functionality. Resolving import errors is crucial for maintaining smooth software operation and uninterrupted development processes.
A workshop hosted by the South African Journal of Science aimed at postgraduate students and early career researchers with little or no experience in writing and publishing journal articles.
Film vocab for eal 3 students: Australia the movie
Module 4 Economics for Managers
1. Module 4: (8 hours)
Market Structure: Perfect Competition: Features, Determination of Price under Perfect Competition -
Monopoly: Features, Pricing under Monopoly, Price Discrimination - Oligopoly: Features, Kinked Demand
Curve, Cartel, Price Leadership - Monopolistic Competition: Features, Pricing under Monopolistic
Competition, Product Differentiation Pricing - Descriptive Pricing- Price Skimming, Price Penetration.
MARKET MORPHOLOGY
Meaning of Market
In general terms ‘a market is the a place where commodities are bought and sold at retail or wholesale prices. A
market place is thought to be a place consisting of a number of big and small shops, stalls and even hawkers selling
various types of goods.
In economics, however, the term “market” does not refer to a particular place as such but it refers to a market for a
commodity or commodities. Thus, economists speak of, say, a wheat market, a tea market, a gold market and so on.
Definition: An arrangement whereby buyers and sellers come in close contact with each other directly or indirectly,
to sell and buy goods is described as market.
It follows that for the existence of a market, buyers and sellers need not personally meet each other at a
particular place. They may contact each other by any means such as telephone or telex.
Thus, the term “market” is used in economics in a typical and a specialized sense:
It does not refer only to a fixed location. It refers to the whole area of operation of demand and supply.
It refers to the conditions and commercial relationships facilitating transactions between buyers and sellers.
Thus, a market signifies any arrangement in which the sale and purchase of goods take place.
Thus, to create a market for a commodity, what we need is only a group of potential sellers and potential
buyers; they may be at different places.
Market may be physically identifiable, e.g., the cutlery market in Mumbai situated at Jumma Masjid Street
or one which is identified in a general sense, without any reference to a particular commodity, such as the
labour market, the stock market, etc…
Existence of different prices for a specific commodity means existence of different markets.
Product and Factor Markets
Analytically, markets may be categorized into: (i) product market, and (ii) factor market.
A ‘product market’ or ‘commodity market’ refers to an arrangement in effecting buying and selling of commodities.
Ex: Cotton market, Wheat market, Rice market, Gold market, Tea market, Cloth market, Automobile market.
While Factors markets in which factors of production such as land, labor and capital are transacted. There
are, thus, markets called labour market, land market, and capital market. The households or the consumers are the
buyers in the product markets. Their demand is the direct demand for the cons umption goods. The firms or the
producers are the buyers in the factor markets. Their demand for productive resources or factors of production is a
derived demand. In the product market, the commodity price of a specific commodity is determined individually in
the concerned commodity market by the interaction of demand for and supply of the commodity. The product
market facilitates exchange of goods in the society. Factor prices such as rent of land, wages of labor and interest for
capital are determined in the factor markets as the price of each factor is determined by the interaction between its
demand and supply in its respective market. Factor markets, in essence, facilitate distribution of income, in the form
of rents, wages, interest and profits.
Classification of Market Structures
2. By and large, a market structure relates to the competitive situation of a business identifying the number of
competitive firms, the relative size and strength of the firms, demand condition, cost and supply condition and the
extend of entry business in the industries. These factors pertaining to a market structure for given business play
significant role in the process of managerial economic decision making.
In view of the space element, or the geographical area covered by the market, we may enlist the following types of
markets:
Local Markets,
Regional Markets,
National Markets, and
World Markets.
I. Local Markets: Markets pertaining to local areas are called local markets. Goods supplied only in local markets
are usually produced on a small scale.
II. Regional Markets: There are regional markets when goods are sold within a particular region only. For
example, most of the firms produced in regional languages in India have regional markets only. Similarly, textbooks
sanctioned by the Maharashtra State SSC Board have a regional market.
III. National Markets: When goods are demanded and sold on a nationwide scale, there is a national market. The
goods produced by large scale industries tend to have national markets. A large number of items such as TV sets,
cars, scoters, fans, vanaspati ghee, cosmetic products, etc., produced by big companies have national markets. A
good of network of transport and communication and banking facilities help in promoting national markets.
IV. World markets: When goods are traded internationally, there exist world markets or international markets. In
international markets, goods are exchanged between buyers and sellers from different countries. In the world market
transactions, we use the term“exports” and “imports” of goods.
Multinational corporations (MNC) have world markets for their products. Similarly, export business is confined to
the world market. Incidentally, on geographical or spatial consideration, trade and markets may also be broadly
classified into: (i) domestic or internal and (i) international. We shall, thus, distinguish between internal trade and
international trade.
3. Market structure crucially determines the business behavior of the firms as well as the conduct and concentration in
industry relating to the pricing policy, product differentiation and improvements, the ease or difficulty for the entry
of the new firms, economic prospects and economic performance, typically measured in terms of profit earnings or
price cost margins of the firms subject to market conditions.
Market Based on Time Elements
Time element to the functional or operational time period pertaining to production processes and market forces at
work. The time element may be distinguished by the following functional time periods of varying durations, namely:
Market period,
Short period,
Long period, and
Very long period or secular time.
Considering these time periods, markets may be distinguished as: (1) Very short period market, (2) Short period
market, (3) Long period market, and (4) Very long period market.
1. Very Short Period Market/ Market Period: The market for a commodity during the market period is referred to
as “the very short period market.” On functional basis, the market period is regarded as a very short time period
during which it is physically impossible to change the stock of a commodity even by a single unit further. The basic
characteristics of a very short period (or market period) market is that, in this market it is not possible to make any
adjustments in the supply to the changing demand conditions. In a very short period market, the equilibriumprice of
a commodity is referred to as the “market price” which is established by the intersection of market period demand
and market period supply.
2. Short period Market: The market of a commodity during short period is referred to as the short period market.
The short period is a functional time period during which it is possible for a firm to expand output of a commodity
to some extent by changing the variable inputs such as labour, raw materials, etc., under its fixed plant size.
3. Long period Market: The market for a commodity in the long period is referred to as “the long period market”.
The long period refers to a functional time period which is sufficient to permit changes in the scale of production to
a firm by changing its plant size.
4. Very Long Period Market: The market for a commodity in the very long period is referred to as “the very long
period Market”. The very long period market is the secular time period which runs over a series of decades. During
such a very long functional time period, dynamic changes takes place in demand and supply situations. However,
the secular period is of little theoretical significance on account of the too long period involved in its operations.
Type of Market Structures formed by the nature of Competition
Perfect Competition
Monopoly
Oligopoly
Monopolistic Competition
1. Perfect Competition: Perfect Competition is a market structure where there is a perfect degree of competition
and single price prevails. The concept of Perfect Competition was introduced by Dr. Alfred Marshall. Nothing is
100% perfect in this world. So, this states that perfect competition is only a theoretical possibility and it does not
exist in reality.
A perfect market is one where there is perfect competition. This is a model market. According to Boulding, “the
competitive market may be defend as a large number of buyers and sellers all engaged in the purchase and sale of
identically similar commodity, who are in close contact with one another and who buy and sell freely among
themselves”.
Main Features of Perfect Competition
The following are the characteristics or main features of perfect competition :-
1. Many Sellers
2. Many Buyers
3. Homogenous Product
4. Zero Advertisement Cost
5. Free Entry and Exit
6. Perfect Knowledge
4. 7. Perfect Mobility of Factors
8. No Government Intervention
9. No Transport Cost
2. MONOPOLY
Monopoly means a market where there is only one seller of a particular good or service. The term ‘Monopoly’ has
been derived from Greek term ‘Monopolies’ which means a single seller. Thus, monopoly is a market condition in
which there is a single seller of a particular commodity who is called monopolist and has complete control over the
supply of his product. He is called a monopolist. He is the only producer in the industry. There are no close
substitutes for his product. Thus, when there is only one seller of a commodity and there is no competition at all, the
situation is one of pure monopoly. A monopolist firm is itself an industry, for the distinction between a firmand an
industry disappears under monopoly. In technical language, pure monopoly is a single firm-industry where the cross
elasticity of demand between its product and the products of the other industries is zero.
Pure monopoly rarely exists in reality. It is merely a theoretical concept, because even if there were no close
substitutes, some kind of competition would always be there, such as a choice between decorating a house or buying
a car. However, even though pure monopolies are a rare phenomenon in developed countries, they are found in
developing countries like India in the form of State monopolies, e.g. the Mahanagar Telephone NigamLtd. (MTNL)
and the Post and Telegraph Department of the Government of India.
Characteristics
Only one single seller in the market. There is no competition.
There are many buyers in the market.
The firm enjoys abnormal profits.
The seller controls the prices in that particular product or service and is the price maker.
Consumers don’t have perfect information.
There are barriers to entry. These barriers many be natural or artificial.
The product does not have close substitutes.
Salient Features of Monopoly
Single Seller
Restricted Entry: Free entry of new organizations in this market arrangement is prohibited, that is, other
sellers cannot enter the market of monopoly. Few of the primary barriers, constricting the entry of new
sellers are:
1. Government license or franchise
2. Resource ownership
3. Patents and copyrights
4. High start-up cost
5. Decreasing average total cost
Homogeneous Product
Full Control Over Price
Price Discrimination
IncreasedScope for Mergers
Price Elasticity: With regards to the demand of the product or service offered by the monopolizing
company or individual, the price elasticity to absolute value ratio is dictated by price increase and market
demand. It is not uncommon to see surplus and/or a loss categorized as 'deadweight' within a monopoly.
The latter refers to gain that evades both, the consumer and the monopolist.
Lack of Innovation: On account of solitary market domination, monopolies exhibit an inclination towards
losing efficiency over a period of time; new designing and marketing dexterity takes a back seat.
Lack of Competition: When the market is designed to serve a monopoly, the lack of business competition
or the absence of viable goods and products shrinks the scope for 'perfect competition'.
5. Being the sole merchant of a eccentric good with no close imitation, a monopoly has no opposition. The demand for
turnout induced by a monopoly is the market demand, adhering extensive market control. The incompetence
resulting from market dominance also makes monopoly a key type of market failure.
Advantages of monopoly
1. Monopoly avoids duplication and hence wastage of resources.
2. A monopoly enjoys economics of scale as it is the only supplier of product or service in the market. The
benefits can be passed on to the consumers.
3. Due to the fact that monopolies make lot of profits, it can be used for research and development and to
maintain their status as a monopoly.
4. Monopolies may use price discrimination which benefits the economically weaker sections of the society.
For example, Indian railways provide discounts to students travelling through its network.
5. Monopolies can afford to invest in latest technology and machinery in order to be efficient and to avoid
competition.
Disadvantages of monopoly
1. Poor level of service.
2. No consumer sovereignty.
3. Consumers may be charged high prices for low quality of goods and services.
4. Lack of competition may lead to low quality and out dated goods and services.
Classification of Monopoly
1. Perfect Monopoly: It is also called as absolute monopoly. In this case, there is only a single seller of product
having no close substitute; not even remote one. There is absolutely zero level of competition. Such monopoly is
practically very rare.
2. Imperfect Monopoly: It is also called as relative monopoly or simple or limited monopoly. It refers to a single
seller market having no close substitute. It means in this market, a product may have a remote substitute. So, there is
fear of competition to some extent e.g. Mobile (Cellphone) telcom industry (e.g. vodafone) is having competition
from fixed landline phone service industry (e.g. BSNL).
3. Private Monopoly: When production is owned, controlled and managed by the individual, or private body or
private organization, it is called private monopoly. e.g. Tata, Reliance, Bajaj, etc. groups in India. Such ty pe of
monopoly is profit oriented.
4. Public Monopoly: When production is owned, controlled and managed by government, it is called public
monopoly. It is welfare and service oriented. So, it is also called as 'Welfare Monopoly' e.g. Railways, Defence, etc.
5. Simple Monopoly: Simple monopoly firm charges a uniform price or single price to all the customers. He
operates in a single market.
6. Discriminating Monopoly: Such a monopoly firm charges different price to different customers for the same
product. It prevails in more than one market.
7. Legal Monopoly: When monopoly exists on account of trade marks, patents, copy rights, statutory regulation of
government etc., it is called legal monopoly. Music industry is an example of legal monopoly.
8. Natural Monopoly: It emerges as a result of natural advantages like good location, abundant mineral resources,
etc. e.g. Gulf countries are having monopoly in crude oil exploration activities because of plenty of natural oil
resources.
9. Technological Monopoly: It emerges as a result of economies of large scale production, use of capital goods,
new production methods, etc. E.g. engineering goods industry, automobile industry, software industry, etc.
10. Joint Monopoly: A number of business firms acquire monopoly position through amalgamation, cartels,
syndicates, etc, it becomes joint monopoly. e.g. Actually, pizza making firm and burger making firm are competitors
of each other in fast food industry. But when they combine their business, that leads to reduction in competition. So
they can enjoy monopoly power in market.
Imperfect Competition
Theoretically, perfect competition is the simplest market situation assumed by the economists. In reality,
competition is never perfect. So, there is imperfect competition when perfect form of competition among the sellers
and the buyers does not exist. This happens as the number of firms may be small or products may be differentiated
6. by different sellers in actual practice. There is no pure monopoly in reality, Imperfect competition covers all other
forms of market structures ranging from highly competitive in nature. Traditionally, oligopoly and monopolistic
competition are categorized as the most realistic forms of market structures under imperfect competition
3. Oligopoly:
Oligopoly refers to the market structures where a few sellers are (more than to but not too many) in a given line of
production. Fellner defines oligopoly as “competition among the few.” In an oligopolistic market, firms may be
producing either a homogeneous product or may have product differentiation in a given line of production, the
oligopoly model fits well in such industries as automobile, manufacturing of electrical appliances, etc, in our
country.
Following are the distinguishing of an oligopolistic market:
1. There are a few sellers supplying either homogeneous products or differentiated products.
2. Firms have a high degree of interdependence in their business policies in fixing price and determining
output
3. Firms under oligopoly have always the fear of retaliation by rivals
4. Competition is of a unique type in an oligopolistic market. Here, each oligopolistic faces competition, and
has to wage a constant struggle against his rivals
5. Advertising and selling costs have strategic importance to oligopolistic firms.
4. Monopolistic competition: Monopolistic competition refers to the market structure in where, there are a large
number of firms producing similar but not identical products. Monopolistic competition is a blend of monopoly and
competition. Monopolistic competition is similar to perfect competition in that it has a large number of sellers, but
its dissimilarities lie in its product differentiation. In perfect competition, goods are identical or homogeneous, while
in monopolistic competition. Products are differentiated through trade marks, brand names, etc. for example, in soft
drink market products are distinguished by brand names such as Thums Up, Limca, etc product differentiation
confers a degree of monopoly to each seller in a market under Monopolistic competition. Thus, in such a market,
many monopolists compete with each other on the selling side. There are a large number of buyers too but each
buyer has preference for a particular seller or a brand of the product in the market. For instance, a smoker may prefer
panama brand cigarettes to wills. Following are the major characteristics of monopolistic competition:
There are a large number of sellers.
There are a large number of buyers.
There is product differentiation. Each seller tries to distinguish his product fromthe rest.
Each seller resorts to advertising and sales promotion efforts. Thus selling costs are a unique feature of
Monopolistic competition
Monopolistic competition has two aspects:
(1) Price competition, i.e,. sellers compete in price determination, and
(2) Non – price competition, i.e,. sellers compete through product improvements and advertising sales promotion
efforts.
COMPETITIVE EQUILIBRIUM PRICE
Perfect competition in practice:
Perfect competition is an ‘ideal concept’ of market rather than an actual market reality. By and large, the perfect
competition model fits into the market for farm products. For instance, in the markets for rice, wheat, cotton, millet
and food grains, fruits, vegetables, eggs, milk, etc., there is a large number of buyers and sellers and for all practical
purposes, the products are physically identical. But, outsider of agriculture, prefect competition is a rare
phenomenon. In fact, in present – day economics, the competitive market is becoming less and realistic even in
agriculture products.
Theoretical importance of the perfect competitive market model
Despite perfect competition being regarded as not very realistic phenomenon, the beginning of economic analysis is
usually made with the competitive market model for the following reasons:
It is a simple and convenient form of market structure to understand.
It is also a near abstraction of the market economy when capitalism ruled supreme.
7. It provides us a clear insight into how a market economy works.
It helps us to form a clear perception of the basic principles governing the functioning of the market
economy
It serves as a first step in understanding the nature of more complex forms of market structures.
It regarded as an ideal form of market on normative grounds.
In fact, people competition is honoured or its perfect efficiency and optimumallocation of resources. It
leads to such rational price determination at which total demand supply are in the long- run optimally
adjusted.
It provides a standard to judge the economic efficiency and welfare implication of less competitive
types of markets.
Competitive markets are not totally absent. Such markets are still found in some areas, e.g. food grain
markets in our country are highly competitive.
Perfect competition, though a limiting and much simplified model of market structure in theory, is a very
useful concept for studying the laws of markets as well as for understanding the mechanics of business
decision making in practice
Price Determination Under Perfect Competition
In a market, the exchange value of a product expressed in terms of money is called price. In a market economy, the
equilibrium price is determined by the market forces.
Under perfect competition, there is a single ruling market price-the equilibrium price, determined by the interaction
of forces of total demand (of all the buyers) and total supply (of all the sellers) in the market.
Thus, both the market or equilibrium price and the volume of production in a market under PE R F E C T
competition are determined by the intersection of total demand and total supply. To elucidate the prices of
intersection, let us consider hypothetical data on market demand for and market supply of wheat, as in table 14.1.
Table.14.1: Market Demand and Supply Schedules for Wheat
Possible price
(Rs. Per kg)
Total Demand
(Kg. per Week)
Total Supply
(Kg. per week)
Pressure on price
20 1,000 10,000 Downward
19 3,000 8,000 Downward
18 4,000 6,000 Downward
17 5,000 5,000 Neutral
16 7,000 4,000 Upward
15 10,000 2,000 Upward
Comparing the market demand and supply position at alternative possible prices, we find that when the price is Rs
20, supply of wheat is 10,000 kg., but demand for wheat is only 1,000 kg. Hence,9,000 kg., of wheat supply remains
unsold. This would bring a downward pressure on price, as the seller would compete and the force will push down
the price. When the price falls to Rs 19, Demand rises to 3,000 kg., while the supply will contract to 8,000 kg., Still
the supply is in excess of demand. Thus, the surplus of the supply causes a further downward pressure on price.
Eventually, the price will tend to fall. This process continues till the price settles at Rs 17 per kg. At which the same
amount (5,000 kg) is demanded as well as supplied. This is termed as equilibrium price. Equilibrium price is the
market clearing price. In this price, market demand tends to be equal to the market supply.
If, However, we begin from a low price (RS 15 per kg.), we find that the demand (10,000 kg) exceeds the supply
(2,000 kg). Thus, there is a shortage at Rs 15 per kg. This causes an upward pressure on the price, so the price will
tend to moveup. When the price rises, the demand contracts and the supply expand. This proces s continues till the
equilibrium price is reached,at which the demand becomes equal to the supply. At equilibrium price, there is neutral
pressure of demand and supply forces as both are equal in quantity. In general, a pictorial depiction of price is
determined at the intersection point of the demand curve and the supply curve.
Fig.14.1: Market Price Determination
8. In figure 14.1 PM is the equilibrium price, at which OM is the quantity demanded as well as supplied. At point P,
The demand curve intersects the supply curve. To understand the process of equilibrium, suppose the price is not at
the equilibrium point. Now, if the price is higher than the equilibrium price, as OP1, then at this price the supply is
P1b, while the demand is P1a. Thus, there is a surplus amounting ab. That is to say, more is offered for sale than
what the people are willing to buy at the prevailing price. Hence, to clear the stock of unsold output, the competing
sellers will be induced to reduce the price. Eventually, a downward movement and adjustment, as shown by the
downward pointed arrows, will begin, which would lead to (i) the contraction of supply, as the firms will be
prompted to reduce their resources in the industry, and (ii) the expansion of demand, as the marginal buyers * and
other potential buyers will be attracted to buy in the marker and old buyers also may be induced to buy more at the
falling price. Similarly, if the price is below the equilibrium level, the demand tends to exceed the supply.
At OP2 price, for instance, the demand is P2d, while the supply is P2c. Thus, there is a shortfall of supply
amounting to cd. That is to say, buyers want to purchase more than what is available in the market at the prevailing
price. This induces the competing buyers to bid up the price. So, an upward push and adjustment will develop as
shown by the arrows pointed upwards. Thus, the demand contracts as marginal buyers will be driven away fromthe
market and some buyers will buy less than before. On the other hand, the supply expands as the existing firms will
increase their output to which new firms will also add their output. Evidently, when the price is set at an equilibrium
point at which demand curve intersects the supply curve, shortages and surpluses, disappear, hence there is perfect
adjustment between demand and supply under the given conditions. So long as demand and supply positions are
unchanged, the ruling equilibrium price will prolong over a period of time.
Significance of Time Element
The element of time occupies a pivotal place in the Marshallian theory of value. According to the traditional value
theory, the forces of demand and supply determine the price. The position of supply is greatly influenced by the
element of time taken into consideration. Here, time refers to the operational time period pertaining to economic
action and force at work. Functionally, the supply of a commodity relates to his operational time involved regarding
adaption of firms in their production activity. Supply is thus adjusted in relation to the changing demand in view of
the time span given for such adjustment.
According to Marshall, the time element may be distinguished by the fallowing three time periods of varying
durations, namely: (1) market period (2) short period and (3) long period. Price determination, in view of this time
span,may be conceived as market period price, short period price and long period price.
Market Period Price
The market period is a very short period. During this period, it is practically impossible to alter output or increase
stock. Thus, supply of the commodity tends to be perfectly inelastic. During the market period, potential supply (the
9. stock) and actual supply tend to be identical thus, the market period or for brevity, the market price is determined by
the iteration of market period demand and supply as shown in figure 14.2.
Fig.14.3.1: Market Period Price
In a panel (A) of figure 14.2, the SS supply curve is vertical straight line, representing perfectly inelastic supply. DD
is the demand curve.
In figure 14.2 (A), the intersection between demand curve (DD) and supply curve (SS) determines the equilibrium
price OP at which demand is equal to supply (OQ).
Supply being fixed during the market period; the equilibrium price - the market period price – tends to be solely
governed by the changes in demand condition. Evidently as demand increases, the market price rises
correspondingly and when demand decrease, the price also decreases to that extent. The point is clarified in panel
(B) of figure 14.2 (a) shifts in the demand curve from DD to D1D1 means an increase in demand along with which
the new equilibrium price rises from OP to OP1. Similarly, there is a decrease in demand as presented by the curve
D2D2, the new price is also set at OP2 level.
Short Period Price
The short period is that functional time period during which the size of the firm and the scale of production remain
unchanged. Hence, during the short period, the stock of a given commodity can be increased only to a limited extent.
As such the supply curves of the existing firms will tend to be relatively inelastic. Therefore, the supply curve of
industry or the market will also be relatively inelastic.
The short period price is determined by interaction of the forces of short – run demand and supply. In graphical
terms, the short period equilibrium price is determined at the point of intersection between the short – run demand
curve and short – run supply curve as shown in fig.
10. Fig.14.3:Short Period Price
In figure 14.3, SS is the short – run market demand curve which has a steeper slope, indicating relatively inelastic
supply (es>1). DD is the Short – run market demand curve. OP is the equilibrium price, at which OQ is the quantity
demanded as well as supplied.
Indeed, in short – run price determination also, demand forces tend to have greater impact as compared to the supply
force. Thus, when the short – run demand increases, there is some variation in supply in the process of adjustment,
but adjustment tends to be imperfect and much less than the market requirement. Short period price is also referred
to as subnormal price.
Long Period Price
Long period is the sufficient functional time period during which the firm can change its size and the
scale of production. Thus, in the long, therefore the supply curve of an industry tends to become relatively
elastic.
Consequently, interaction between long – run supply and demand determines the long period equilibrium
price. Geographically, the long – run price is determined at the point of intersection between the long –
run demand and supply curves, as shown in fig. 14.4.
11. Fig.14.4: Long Period Price
In figure 14.3.SS is the long – run supply curve which is flatter curve, indicating relatively elastic supply (es>1). DD
is the long – run demand curve which is also more elastic OP is the equilibrium price at which OQ is demanded as
well as supply.
In the long – run as compared to the demand force, the supply force becomes a dominant factor in determining the
equilibrium price. The Long – run price is also described as normal price.
Concluding Remarks
The Marshallian time analysis suggests that the degree of elasticity of supply tends to vary in relation to time. The
supply tends to be relatively inelastic in the short – run and relatively elastic in the long – run. Again, in the short
period, the utility of the commodity concerned has greater significance in the determination of its value (i.e., value
in exchange or price). In the long – run, the supply factor bears greater influence upon the equilibrium price
determination. The supply factor is based on the cost element. Thus, in the long run, cost considerations has greater
significance in the determination of value in fine, we may quote Marshall “Actual value at any time, the market
value as it is often called, is often influenced by passing events and causes whose action is fitful and short – lived
than by those which work persistently. But in long periods, these fitful and irregular causes, in a large measure,
efface one another’s influence that in the long – run, persistent causes dominate values completely.”
Market Price and Normal Price
A distinction is often made between market price and normal price. The fallowing points may be enumerated in this
regard.
Market price, in its strict sense, refers to the market period price. It is the equilibrium price determined by the
interaction of day – to – day demand and supply. Normal price on the other hand, refers to the long period price. It is
the equilibrium price determined by the forces of long – run demand supply.
MEANING OF MONOPOLY
Monopoly is a form of market structure in which a single seller or firm has control over the entire market supply, as
there are no close substitutes for his products and there are business to the entry of rival producers. This sole seller
in the market is called ‘monopolist’.
FEATURES OF MONOPOLY
1. Single firm:
2. No substitutes:
3. Antithesis of competition:
4. Price maker:
5. Downward sloping supply curve
6. Entry barriers:
7. Price-cum-output determination:
The Benefits of monopoly
12. The benefits of monopoly power to the economic society depend, to the some extent upon the attitude and behavior
of the monopoly firm.
1. Workers may benefit. Workers in a monopoly firm will tend to be better off the monopoly profits are shared
with the workforce by provided better working condition and facilities.
2. Growth of R&D. research and development may be facilitated by reinvestment of monopoly profit.
3. Innovation & growth initiation. High concentration economic power or large firm size may be more conducive
to a higher rate of innovation.
4. Economies of scale and slope. This can be realized through the production of innovation.
5. Capability. Large firm can easily bear the high cost involved in innovation.
6. Risk spreading. Through diversification of output. The large firm can spread the risk R&D.
7. Availability of finance. Large firm can easily arrange for the financial requirements of the R&D through internal
as well as external sources.
8. Incentives. With a command over a greater market power, the large or monopolistic firm can easily appropriate
the returns from innovation. As such there are greater incentives for the large firms to undertaken innovation.
9. Contribution to public revenue. The government can obtain good revenues through high corporate taxes
imposed on monopoly profits earnings of the firm. This may also serve as a means curb the undue growth of
monopoly power.
PRICE-OUTPUT DETERMINATION UNDER MONOPOLY:
A firm under monopoly faces a downward sloping demand curve or average revenue curve. Further, in monopoly,
since average revenue falls as more units of output are sold, the marginal revenue is less than the average revenue.
In other words, under monopoly the MR curve lies below the AR curve.
The Equilibrium level in monopoly is that level of output in which marginal revenue equals marginal cost. The
producer will continue producer as long as marginal revenue exceeds the marginal cost. At the point where M R is
equal to MC the profit will be maximum and beyond this point the producer will stop producing.
It can be seen from the diagram that up till OM output, marginal revenue is greater than marginal cost, but beyond
OM the marginal revenue is less than marginal cost. Therefore, the monopolist will be in equilibrium at output OM
where marginal revenue is equal to marginal cost and the profits are the greatest. The corresponding price in the
diagram is MP’ or OP. It can be seen from the diagram at output OM, while MP’ is the average revenue, ML is the
average cost, therefore, P’L is the profit per unit. Now the total profit is equal to P’L (profit per unit) multiply by
OM (total output).
In the short run, the monopolist has to keep an eye on the variable cost, otherwise he will stop producing. In the long
run, the monopolist can change the size of plant in response to a change in demand. In the long run, he will make
13. adjustment in the amount of the factors, fixed and variable, so that MR equals not only to short run MC but also long
run MC.
MONOPOLISTIC COMPETITION:
MEANING:
Monopolistic competition is that form of the market in which there are many sellers of a particular product, but each
seller sells somewhat different products. It is also called as Imperfect Competition.
For EX: “SOAP MARKET”, where LUX is exhibited to be beauty soap, LIRIL is more related with freshness, while
DETTOL is exhibited as an antiseptic soap.
CHARACTERISTICS OF MONOPOLISTIC COMPETITION
1. Large Number of Sellers:
A market organization characterized by monopolistic competition must have a sufficiently large number of sellers or
firms selling closely related, but not identical products. The large number of firms, in the same line of production,
leads to competition. Since there is no homogeneity of goods supplied, competition tends to be pure but keen. The
number of firms being relatively large, there are less chances of collusion of business combines to eliminate
competition and to rig (arrange to gain) prices.
2. Product Differentiation:
It is one of the most important features of monopolistic competition. Each firm produces a different brand or variety
of the same products. The variety produced is closed substitutes of one another. Since all the brands are close
substitutes of one another, the seller will lose some customers to his competitors. Products like toothpaste, soap and
lipstick are prominent examples.
3. Large Number of Buyers:
There are large numbers of buyers in this type of market. However, each buyer has a preference for a specific brand
of the product. He thus becomes a patron of a particular seller. Unlike perfect competition, here buying is by choice
and not by chance.
4. Free entry and exit :
There are free entry and exit firms. It implies that in the long run firm will earn only normal profits.
5. Non Price Competition:
In this type of market sellers try to compete on basis other than price, and it is called non-price competition. They
incur advertising costs. It is because of the need to maintain a perception in the mind of the potential customers that
their respective brands are different compared to other brands.
6. Every firm is price maker and taker of his own product:
In monopolistic competition product are differentiated for every firms and so costs of every firm and the cost of
products manufactured by the firms are also different. Thus every firm is price maker and price taker for their
products.
7. Imperfect Mobility:
Here factors of production are completely not mobile. Buyers have their own preference and sellers have their own
preference.
Examples of monopolistic competition
Examples of monopolistic competition can be found in every high street.Monopolistically competitive firms are
most common in industries where differentiation is possible, such as:
14.
Consumer services, such as hairdressing
PRICE DETERMINATION UNDER MONOPOLISTIC COMPETITION:
Under monopolistic competition, the firm will be in equilibrium position when marginal revenue is equal to
marginal cost. So long the marginal revenue is greater than marginal cost, the seller will find it profitable to expand
his output, and if the MR is less than MC, it is obvious he will reduce his output where the MR is equal to MC. In
short run, therefore, the firm will be in equilibrium when it is maximising profits, i.e., when MR = MC.
Short Run Equilibrium: the short run average cost is MT and short run average revenue is MP. Since the AR curve
is above the AC curve, therefore, the profit is shown as PT. PT is the supernormal profit per unit of output. Total
supernormal profit will be measured by multiplying the supernormal profit to the total output, i.e. PT × OM or
PTT’P’ as shown in figure (a). The firm may also incur losses in the short run if it is facing AR curve below the AC
curve. In figure (b) MP is less than MT and TP is the loss per unit of output. Total loss will be measured by
multiplying loss per unit of output to the total output, i.e., TP × OM or TPP’T’. (Diagram not furnished)
(b) Long Run Equilibrium: Under monopolistic competition, the supernormal profit in the long run is disappeared
as new firms are entered into the industry. As the new firms are entered into the industry, the demand curve or AR
curve will shift to the left, and therefore, the supernormal profit will be competed away and the firms will be earning
normal profits. If in the short run firms are suffering from losses, then in the long run some firms will leave the
industry so that remaining firms are earning normal profits.
The AR curve in the long run will be more elastic, since a large number of substitutes will be available in the long
run. Therefore, in the long run, equilibriumis established when firms are earning only normal profits. Now profi ts
are normal only when AR = AC : (Diagram not furnished)
(a) OLIGOPOLY MARKET
(b) Meaning of oligopoly:
(c) It is a market situation comprising only a few firms in a given line of production. Their products may be
standardized or differentiated. The price and output policy of oligopolistic firms are interdependent. The
oligopoly model fits well into such industries as automobile, manufacturing of electrical appliances, etc, in
our country.
(d) In fast food industry, for example, in case of burger, etc., we come across only a few prominent brand
suppliers such as McDonalds, KFC, King burger. Network of mobile phone services are provided by Airtel,
Vodafone, Tata and MTNL. Ready-to-eat breakfast industry is dominated by Corn Flakes, Nestle, Kraft
and Quaker Oats with a few others. There are only a few prominent brands of television set in India, such
as, Sony, Samsung, LG, and Videocon.
(e) Feller defines oligopoly as “competition among the few”. In an oligopolistic market, the firms may be
producing either homogeneous products or may be having product different0iation in a given line of
production.
(f) Features
(g) The following are the distinguishing features of an oligopolistic market:
(h) Few sellers : there are a few sellers supplying either homogeneous products or differentiated products.
(i) Homogeneous or distinctive product : the oligopoly firm may be selling a homogeneous product. For
example, Steel/Aluminium/Copper. these can be a unique or distinctive product. For example, Automobile-
Passenger Cars.
(j) Blockading entry and exit : firms in the oligopoly market face strong restrictions on entry or exit.
Imperfect dissemination of information : detailed market information relating to cost, price and product quality
are usually not publicized.
Interdependence : the firms have a high degree of interdependence in their business policies about fixing of
price and determination of output.
Advertising : advertising and selling costs have strategic importance to oligopoly firms. “it is only under
oligopoly that advertising comes fully into its own”. Each firm tries to attract consumers towards its product by
incurring excessive expenditure on advertisements.
15. High cost elasticities : the firm under oligopoly have a high degree of cross elasticities of demand for their
products, so there is always a fear of retaliation by rivals. Each firm consciously consider the possible action and
reaction of its competitors while making any changes in the price or output.
Constant struggle : competition is of unique type in an oligopolistic market. Here, competition consist of
constant struggle of rivals against rivals.
Lack of uniformity : lack of uniformity in the size of different oligopolies is also a remarkable characteristic.
Lack of certainty : lack of certainty is also an important feature. In oligopolistic competition, the firms have
two conflicting motives. (i) to remain independent in decision making, and (ii) to maximize profits, despite the fact
that there is a high degree of independence among rivals in determining their course of business. To pursue these
ends,
they act and react to the price-output variation of one another in an unending atmosphere of uncertainty.
Price rigidity : in an oligopolistic market, each firm sticks to its own price. This is because, it is in constant fear
of retaliation from rivals if it reduces the price. It, therefore, resorts to advertisement competition rather than price-
cut. Hence, there is price rigidity in an oligopolistic market.
Kinked demand curve : According to Paul Sweezy, firms in an oligopolistic market have a kinked demand
curve for their product.
Kinked demand curve
(a) The kinked demand curve or the average revenue curve is made of two segments. (i) the relatively elastic
demand curve and (ii) relatively inelastic demand curve.
Corresponding to the given price OP, there is a kink at point K on the demand curve DD. Thus, DK is the elastic
segment and KD is the inelastic segment of the curve. Here, kink implies an abrupt change in the slope of the
demand curve. Before the kink point, the demand curve is flatter. After the kink, it becomes steeper.
Above the kink at a given price, demand curve is more elastic and below the kink less elastic. The kink leads to
indeterminateness of the course of demand for the product of the seller concerned. He thus, thinks it worthwhile to
follow the prevailing price and not to make any change in it, because raising of price would contract sales as demand
tends to be more elastic at this stage. There is also the fear of losing buyers to the rivals who would not raise their
prices.
On the other hand, a lowering of price would imply an immediate retaliation from the rivals on account of close
interdependence of price-output movement in the oligopolistic market. Hence, the seller will not expect much rise in
his sale with price reduction.
Kinked Demand Curve Theory of Oligopoly Price
16. An important point involved in kinked demand curve is that it accounts for the kinked average revenue curve to
the oligopoly firm.The kinked average revenue curve, in turn, implies a discontinuous marginal revenue curve MA-
BR. Thus, the kinky marginal revenue curve explains the phenomenon of price in the theory of oligopoly prices.
Because of discontinuous marginal revenue curve(MR), there is no change in equilibrium output, even though
marginal cost changes hence, there is price rigidity. OP does not change.
It is observed that quite often in oligopolisticmarkets,once a general pricelevel is reached whether by collusion or
by price leadership or through some formal agreement, it tends to remain unchanged over a period of time. This
price rigidity is on account of conditions of price interdependence explained by the kinky demand curve.
Discontinuity of the oligopoly firm’s marginal revenue curve at the point of equilibrium price, the price-output
combination at the kink tends to remain unchanged even though marginal cost may change.
It can be seen that the firm’s marginal cost curve can fluctuate between MC1 and MC2 within the range of the gap
in the MR curve. Without disturbing the equilibrium price and output position of the firm. Hence, the price remains
at the same level OP, and output OQ, despite change in the marginal costs.
Pattern of behavior in oligopolistic markets
17. Haynes, Mote and Paul (1970), have enlisted the following important patterns of behavior normally observed in
oligopolistic markets:
Price leadership
A traditional leader in the oligopoly market announces price changes from time to time which other competitors
follow. The dominant firm may assume the price leadership. There is barometric price leadership when a smaller
firm tries out a new price, which may or may not be recognized by the larger firms.
The price leadership of a firm depends on a number of factors, such as:
a) Dominance in the market: dominating position in the market is achieved by the firm when it claims a substantial
share of the market.
b) Initiative: when the firm develops a product or a new sales territory.
c) Aggressive pricing: when the firm charges lower prices aggressively and captures a sizeable market.
d) Reputation: when the firm acquires reputation for sound pricing and accurate decisions due to its long standing
in the business, the other firms may accept its leadership.
In the oligopoly market, price leadership of a dominant firm is a unique phenomenon. A leader firm usually is the
most reputed firm in the circle, or the most efficient one or the dominating firm determines with its own perception
of the total industry profit maximizing price. Then, the followers firms also set their price at the same level in a co -
operative mood to avoid price competition. Often in a oligopoly market, therefore, once the price is set by the leader
firm, the follower’s firm too set the same price and tend to compete on the layers of non-price competition, such an
advertising and other methods of marketing.
As such, the price of the price of the product in an oligopoly market tend to remain constant and there is a least
chance of price competition, unless and until the leader firm charges the price. There is, however, no written
agreement on this issue. But, there is an implicit practical norm seen at times followed by the oligopolist firm in
certain business such as the steel, cigarette, oil, tyre, cellphones, tanks and so on.
Price wars
Under cut-throat competition among the rivals, price wars may emerge in an oligopolistic market. Under price wars,
firm tend to charge prices even below their variable cost. Price wars are never planned. They occur as a consequence
of one firm cutting the prices and others following it.
Price-cuts to weed out competition
A financially strong firm may deliberately resort to price-cuts to eliminate competitors from the market and secure
its position.
Collusion
Business syndicates or trusts may be formed by the competing firms and agree to charge a uniformprice, thereby to
eliminate price retaliation or price-cut competition. Such business collusion implies conversion of an oligopoly into
a monopoly. Business collusion is considered illegal under anti-trust laws, such as the competition Act, 2002, in
India.
Cartel
In some cases, business cartels are the unique feature of oligopoly. In this case, the existing sellers forms an
agreement on controlling market supply jointly and determining the price for their output with the creation of
monopoly power. The OPEC is an international cartel in the world’s petroleum market.
Cartels are formed to enjoy a monopoly power. It is, however, regarded to be more harmful than the monopoly by is
itself. A monopoly is supposed to be creating some harms of consumer exploitation only when the seller intends to
exercise this monopoly power. Cartel, on the other hand, is just designed to earn monopoly profit to the
collaborating members by restricting the output and using the monopoly power straight away to raise the price.
Cartels violates competitive spirit and the laws.
In a country, such as Korea, for instance, the cartel is, thus, regarded as the public enemy number one in the market
economy. The Korea Fair Trade Commission(KFTC) undertakes strict actions against cartels. Cartels regulations is
emphasized in the enactment at the Monopoly Regulation and Fair Trade Act(MRFTA) of the Korean business law
passed in 1981. In the new millennium, there has been an increasing trend in the number of prosecution against
cartel members in Korean business.
18. In practice, however, detection of cartel is not an easy task. Often, information reward system and insider
information resorted to for the detection. ‘Amnesty plus’ and leniency programme are also introduced to increase the
rate of detection.
By and large, relatively more a centralized Cartel then it is more powerful and effective in raising the price due to its
higher degree of monopoly power in the market (see, Griffin, 1989).
Determination of Cartel Duration and Success
Number of Firms: there is a negative relationship between the number of firms in the Cartel and its duration.
This is for the obvious reason of co-ordination problems and intensities when the number of firms is large.
Industry concentration: Cartel duration tends to be longer lasting when there is a higher degree of industry
concentration. That is, when a large market share is controlled by the Cartel members.
Large customer: Instability of Cartel would be more when selling to relatively large buyers as they may
provide incentive for a Cartel is presumed under an increase in demand growth.
Demand growth: a negative effect on duration of Cartel is presumed under an increase in demand growth.
Economic and demand stability: stable demand in an industry will sustain a Cartel for a long duration. Cartels
are destabilized by the instability of demand. Apparently, violent economic changes create negative effect on
stability and duration of Cartel in oligopoly markets.
Organization features: the success and durability of Cartel is conditioned by its internal organizational
characteristics such as existence and execution of penalties on defector firms, narrowness of product scope in the
market, specialized and complex governance structure.
Internal conflict: Cartels are destabilized or have breakdown due to internal conflicts and defection by the
member firms. Disagreement over market conflicts and defection by the member firms. Disagreement over the
market shares, bargaining and monitoring prices wars have caused breakdown of Cartels in several cases of
opportunistic behavior of Cartel members.
Technological change : in some cases of technological change, such as rubber industry, zinc, etc., cartel have
natural breakdown.
To sum up, usually with larger duration in greater market shares are more concentrated industries. Lesser
concentration and lower market share is linked to a shorter duration of Cartels. Cartels are destabilized by instability
of economic and business situation in the markets. By and large, external factors and their relationship exert
influences on the success and stability in Cartels in general (see, Levenstein Margaret and Valerie Suslow, 2001)
Secret Price Concessions
Sometimes, oligopolies may offer secret price concessions for selected buyer instead of having an open price-cut,
which is likely to be retaliated by their rivals.
Non-price Competition
Owing to the danger of retaliation in price-cut competition, the oligopolists may also resort to non-price competition
in sales promotion efforts, advertising, product improvement, etc. Here, too, the rivals do retaliate.
PRICE DISCRIMINATION
Price discrimination refers to the practice of a seller of selling the same good at different prices to different buyers.
A seller makes price discrimination between different buyers when it is both possible and profitable for him to do
so. Price discrimination is not a very common phenomenon.
It is very difficult to charge different prices for the identical good from different customers. Frequently, the product
is slightly differentiated to successfully practice price discrimination.
In the words of Mrs. John Robinson “The act of selling the same article, produced under single control at different
prices to different buyers is known as price discrimination”. Also Prof. Stigler defines Price discrimination as “the
sales of technically similar products atprices which are not proportional to marginal cost” As per this definition, a
seller is indulging in price discrimination when is charging different prices from different buyers for the different
varieties of the same good if the differences in prices are not the same as or proportional to the di fferences in the
cost of producing them. For Example, If the manufacturer of a mobile of a given variety sells at Rs. 10.000/- to one
buyer and at Rs. 11,000/- to another buyer, (Specific Model) he is practicing price discrimination.
19. Price discrimination is not possible under perfect competition, even if the two markets could be kept separate.
Sincemarket demand in each market is perfectly elastic,every seller would try to sell in thatmarket in which could
get the highest price. Competition would make the price equal in both the markets. However, price discrimination
is possible and profitable only when markets are imperfect.
TYPES OF PRICE DISCRIMINATION
Price discrimination is of various types. Some of them are as follows:
1. Personal price discrimination: It may be personal based on the income of the customer. For example, Doctors and
Lawyers charge different fees from different customers on the basis of their income. Higher fees are charged to rich
persons and lower to the poor.
2. Geographical or Local discrimination: There is geographical price discrimination when a monopolist sells in one
market at a higher price than in the other market. For example, in a posh locality, a beauty parlor may be charging
more while charging lower rate for the same service in a common locality.
3. Discrimination on the basis of Nature of the Product: Different prices are charged when there is a difference in the
quality of the product. For example, Unbranded products, like open tea, are sold at lower prices than branded tea like
Brooke Bond or Tata tea.
4. Discrimination on the basis of Age, Sex and Status: Here different prices are charged on the basis of age, sexand
status of consumers. For example, railways fare for children and senior citizens are different, various states in India
there is no fees for girls in schools and in case of Toll tax all MLAs, MPs and Ministers are exempted.
5. Discrimination on the basis of Time: Different rates may be charged for a service depending upon time. For
example, Telephone STD call rates at day time and night. Besides, advertising rates on TV based on prime time and
non –prime time.
6. Discrimination on the basis of Use of product / Service: Prices differ according to the use to which the product is
utilized. For example, electricity per Unit rates are different for users as domestic use, Farmuse and industrial use.
Degree of Price Discrimination: It is the extreme case of price discrimination. Under this, the monopolist charges
different prices to different unit if the same product. The price charged for each unit, in each buyer’s case, is set in
accordance with the marginal utility the buyer estimates and thus at what maximum price he is willing to pay for it .
Under first degree price discrimination, the entire consumer’s surplus of the buyer is converted into monopolist’s
revenue and profits.
Perfect Price Discrimination
20. First degree price discrimination may better be called perfect discrimination. When a monopolist can charge each
buyer the highest price that he/she is willing to pay, the price discrimination is perfect. The above figure illustrate
perfect discrimination through a diagrammatic model.
The monopoly firm equates its supply curve with demand curve and produces OQ level output. The firm charges
each buyer a price which he is willing to pay the most highest say, he may be charging Rs 19 to a buyer which he is
willing to pay utmost. He charges Rs. 9 to a buyer who is willing to pay only up to Rs 9 for the unit and so on.
There are two major problems encountered in resorting to perfect price discrimination . First, the monopolist should
know perfectly well as to how much maximum price buyer is willing to pay.
In practice, these conditions cannot be perfectly well . Often, therefore, price discrimination tends imperfect . It may
be met practically well . It may be of a second degree or third degree price discrimination.
2. Second Degree Price Discrimination
Under this category discrimination, the monopolist sells blocks of output at different prices . Here, the possible
maximum price is charged for some given minimum block of output purchased by the buyer and then the additional
blocks are sold at successively lower prices.
Thus, when first degree price discrimination is case of unit-wise differing , the second degree price discrimination is
a case of block –wise differing prices . In the second degree price discrimination, the monopolist captures a part of
the consumer’s surplus and not the whole of it.
Thus, in the case of public utilities , like supply of electricity, telephone services, gas services, rail and bus transport
services, etc., the services are given in blocks of small units, such as kilowatts of distance, etc.,
3. Third Degree Price Discrimination
Third degree price discrimination price discrimination is the most common type of monopolist price discrimination
in which the firm divides its total output into many sub market and sets different prices for its product in market in
relation to the demand elastics. The third degree price discrimination , thus, crucially differs fromthe second degree
one in one respect that in the latter case, the price tends to be minimum as per the marginal utility of the marginal
buyers , while in the case of the former, price depends on the allocation of the output.
The below figure represents the case of third degree price discrimination .Two markets are taken into account .
Demand curves for the market I and market curve II are D1 and D2 respectively.D1 is less elastic and D2 is more
elastic demand curve . When the monopoly firm produces Q1Q2 total output , it distributes OQ amount in market I
and OQ2 in market II.
21. The Ingredients for Discriminating Monopoly: Conditions Essential for Price Discrimination
• Monopoly
• Segmentation of the Market
• Apparent Product Differentiation
• Buyers’ Illusion
• Prevention of resale or re-exchange of goods
• Non-transferability characteristics of goods
• Let-go attitude of buyers
• Legal sanction
Product Differentiation Pricing
A marketing process that showcases the differences between products. Differentiation looks to make a product more
attractive by contrasting its unique qualities with other competing products. Successful product differentiation
creates a competitive advantage for the seller, as customers view these products as unique or superior.
Firms seek to be unique along some dimension that is valued by consumers. Differentiation can be based
on the product itself, the delivery system, or the marketing approach.
If the firm/product is unique in some respect, the firm can command a price greater than cost.
Full cost (cost-plus) pricing
Under this method, the cost of product is calculated and a fair percentage of profit margin is added hence,
the price of the product is determined.that is
PRICE=COST+FAIR PROFIT MARGIN
Cost means full allocated cost at current output n wage levels. according to Joel Dean(1972) there are 3
different concepts of cost used in the formula of full costing pricing.
Actual cost usually means historical cost for the latest available period. It includes wages, materials,
overheads charges etc
Expected cost means forecast of actual cost for the pricing period on the basis of the expected prices, output
ratios, efficiency
Standard cost means normal cost at some normal rate of output with efficiency at some standard level,
which may be normal level or an optimum level
22. Fair profit means a fixed percentage of profit mark up. It differs from industry to industry and among firms
Price skimming
Price skimming is a product pricing strategy by which a firm charges the highest initial price that custo mers will
pay. As the demand of the first customers is satisfied, the firm lowers the price to attract another, more price-
sensitive segment.
The causes for the adoption are:
Heavy expenditure on a new product
Absence of competition at the initial stage
Demand is relatively less elastic
Suitable for luxurious products
Early recovery of initial investment
Attracting the consumers of high income group
Earning high rate of profit at the initial stage
Price Penetration
A marketing strategy used by firms to attract customers to a new product or service. Penetration pricing is
the practice of offering a low price for a new product or service during its initial offering in order to attract
customers away from competitors. The reasoning behind this marketing strategy is that customers will buy
and become aware of the new product due to its lower price in the marketplace relative to rivals.
Penetration pricing can be a successful marketing strategy when applied correctly. It can often increase
both market share and sales volume. Additionally, the high sales volume can also lead to lower production
costs and higher inventory turnover, both of which are positive for any firmwith fixed overhead. The chief
disadvantage, however, is that the increase in sales volume may not necessarily lead to a profit if prices are
kept too low. As well, if the price is only an introductory campaign, customers may leave the brand once
prices begin to rise to levels more in line with rivals.
The causes for the adopting are:
Low cost of production of a need product
Economies of a large scale production
Low expenditure on research advertisement and sales promotion programme
Enter and expand the market
Suitable when the demand for a product is relatively elastic
Discouraging competition
Attracting consumers of low income group
Discouraging government intervention
Earning maximum profit through maximum sales.
Pricing over a life cycle of a product
There are 6 stages in the life cycle of a product:
INTRODUCTION: this is the first stage in the life cycle of a product. A product is developed and introduced in the
market as a new one. There are 2 strategies in it:
1) High initial pricing strategy
2) Low initial pricing strategy
GROWTH: at this stage the product gets popularity among consumers and the demand for a product increases
steadily. Firms get the opportunity to earn maximum profits through maximum sales. At this stage if there is no
competition in the market, the firm can fix relatively high price for the product. To sustain growth consumer
satisfaction should be ensured at this stage.
MATURITY: at this stage, though the sales of a product continue to increase the rate of increase in sales declines
.this is because of the fact that the number of potential consumers for the product starts declining. Hence the product
loses its popularity. A number of substitutes come to the market. The product becomes a common one. There is no
scope for improvement in the quality of the product.
23. SATURATION: at this stage, the demand for the product stabilizes and there is in demand. Advertisement and sales
promotion activities should be intensively undertaken to maintain the demand for the product. At this stage the level
of sales of the product reaches a stage when demand starts shifting to other products.
DECLINE: at this stage, the sales of the product start declining. Substitute products become more popular. All
efforts taken to increase or to maintain the demand for the product become ineffective. At this stage, the firmshould
follow break-even point price policy so as to continue its production activities.
OBSOLESCENCE: this is the last stage in the life cycle of a product. At this stage there are almost no sales of the
product. Practically the product is out of the market and its production should be discontinued. The resources
engaged in its production should be diverted to the production of their product.
Price discount:
Price discounts the difference between the list price shown in the catalogue and the net price charged by the
producer. The price charged by the producer or the seller is always lower than the list price.
There are 3 types of prices discounts as mentioned below:
1) Distributor’s discount
2) Buyer’s discount
3) Dealer’s discount
Peak load pricing:
Peak load pricing is a method of charging a higher price from consumers who require service during periods of peak
demand and a lower price for those who consume during off-peak periods.
Peak load pricing may be suitable only if three conditions are met in producing a product:
1) The product cannot be storable. Pricing of long-distance telephone calls is an example of peak-load pricing.
2) The same facilities must be used to provide the service during different periods of time.
3) There must be variation in demand characteristics of consumers at different periods of time.
Transfer pricing:
Transfer pricing is a method of charging a price by different divisions of the same firm for goods and services
exchanged between them. Transfer prices are determined by the following methods:
1) Market price
2) Bargained market price
3) Full or marginal costs.
Module 5: (8 hours)
Indian Economic Environment: Overview of Indian Economy, Recent changes in Indian Economy.
Measurement of National Income: Basic Concepts, Components of GDP- Measuring GDP and GNP,
Difficulties in measuring National Income, Growth Rate.
Business Cycle – Features, Phases, Economic Indicators, Inflation : Types, causes, Measurement , Kinds of
Price Indices, Primary, Secondary and Tertiary Sectors and their contribution to the Economy, SWOT
Analysis of Indian Economy.
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Overview of Indian Economy
With 1.2 billion people and the world’s fourth-largest economy, India’s recent growth and development has
been one of the most significant achievements of our times. Over the six and half decades since independence, the
country has brought about a landmark agricultural revolution that has transformed the nation from chronic
dependence on grain imports into a global agricultural powerhouse that is now a net exporter of food. Life
expectancy has more than doubled, literacy rates have quadrupled, health conditions have improved, and a sizeable
middle class has emerged. India is now home to globally recognized companies in pharmaceuticals and steel and
information and space technologies, and a growing voice on the international stage that is more in keeping with its
enormous size and potential.
Historic changes are unfolding, unleashing a host of new opportunities to forge a 21st-century nation. India will
soon have the largest and youngest workforce the world has ever seen. At the same time, the country is in the midst
of a massive wave of urbanization as some 10 million people move to towns and cities each year in search of jobs
and opportunity. It is the largest rural-urban migration of this century.
The historic changes unfolding have placed the country at a unique juncture. How India develops its significant
human potential and lays down new models for the growth of its burgeoning towns and cities will largely determine
the shape of the future for the country and its people in the years to come.
24. Massive investments will be needed to create the jobs, housing, and infrastructure to meet soaring aspirations
and make towns and cities more livable and green. Generating growth that lifts all boats will be key, for more than
400 million of India’s people–or one-third of the world’s poor–still live in poverty. And, many of those who have
recently escaped poverty (53 million people between 2005-10 alone) are still highly vulnerable to falling back into
it. In fact, due to population growth, the absolute number of poor people in some of India’s poorest states actually
increased during the last decade.
Inequity in all dimensions, including region, caste and gender, will need to be addressed. Poverty rates in
India’s poorest states are three to four times higher than those in the more advanced states. While India’s average
annual per capita income was $1,410 in 2011–placing it among the poorest of the world’s middle-income countries–
it was just $436 in