Ebay perfect competition


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Ebay perfect competition

  2. 2. T YPES OF MARKET Monopoly Oligopoly Monopolistic competition Perfect competition
  3. 3. PERFECT COMPETITIONMarket structure where competition among sellersand buyers prevails in its most perfect form. Large number of sellers and buyers Price taking Product homogeneity Free entry and exit
  4. 4. TABLE : PRICE DETERMINATION UNDER PERFECT COMPETITIONPrice Market Market Pressur(Rs) Deman Supply e on d Units Price Units 5 10 50 D‹S 4 20 40 D‹S 3 30 30 D=S 2 40 20 D›S 1 50 10 D›S
  5. 5. What happens when price becomes higher orlower then the Equilibrium Price ?
  6. 6. IMPORTANT OBSERVATIONS. Price under perfect competition is determined by the industry, not by an individual firm. Price under perfect competition is known as equilibrium price because it corresponds to equilibrium of the industry. An individual firm under perfect competition cannot change the equilibrium price. Excess demand occurs when, corresponding to the existing price, demand for commodity is greater than its supply (D › S). Excess supply occurs when, corresponding to the existing price, supply of a commodity is greater than its demand (S › D).
  7. 7. SAY HELLO TO EBAYOnline marketplaceLarge scale trade of varied items3 segments -market places - payments - communicationsSource of revenue
  8. 8. WHY EBAY PERFECT COMPETITIONProducts on the web site are available at prices better than those one can find in traditional or online stores. i.e. large buyersAnyone can sell nearly anything i.e. large sellersTransaction by individual buyer and seller is very small therefore they are price takers.Limit to each user for listing the product so no chance of monopoly No possibility of economies of scale
  9. 9. CONTI….. Competitive advertising does not occur because the products are categorized and sub- categorized into homogeneous products. Entry and exit as a business in eBay is quite easy. No browsing cost for buyers and the eBay fee schedule identical selling costs for all the sellers. Rational behavior and the part of sellers and buyers ,eg: play station 3.
  10. 10. E-BAY AND PERFECT COMPETITIONeBay is a place to buy ,sell and window shop.The products on the website have prices better than traditional or other online stores.Individual seller ,small retailer or big company all are sellers and can sell nearly anything by listing their items on eBay.Huge variety of things are available with enormous details
  11. 11. CONTI…Buyers and sellers both are price takers.Only 10 simultaneous listing for identical good is allowed ,so no possibility of economies of scale.Competitive advertising does not occur as products are categorized and sub categorized into homogeneous ones.Entry and exit as a business on eBay is very easy.Several sellers of common products and several buyers are features of eBay.
  12. 12. BUYERS ADVANTANGE OF EBAY EASY AVALIBILIT Y - Whatever you want to buy, whether its large or small, cheap or expensive, everyday or just plain weird, the chances are you can find it on eBay. AN online marketplace where you can buy things from all over the world, without leaving your home. You can get things that you would never think anyone would bother to sell, and you can get them cheaply. The powerful search engine means that you can find things you will like without even knowing exactly what you are looking for.
  13. 13. CONTI...Money can be send quickly and electronically to almost all of these sellers, without worrying about currency conversion or exchange rates or anything else.For bargains, eBay is an ideal place to buy.
  14. 14. THANKYOU