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Forms of Markets

Forms of Markets. Various Types of Markets. Buyer. Seller. Essentials of Markets in Economics. Commodity. Transaction. Name the Market based on Features. Large Numbers of Sellers. Large Numbers of Buyers. Homogeneous Commodity. Free Entry and Exit of Firms. Firm is a Price Taker.

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Forms of Markets

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  1. Forms of Markets

  2. Various Types of Markets

  3. Buyer Seller Essentials of Markets in Economics Commodity Transaction

  4. Name the Market based on Features

  5. Large Numbers of Sellers Large Numbers of Buyers

  6. Homogeneous Commodity Free Entry and Exit of Firms

  7. Firm is a Price Taker S Price Revenue D O O Quantity (thousands) Quantity (millions) (a) Industry

  8. Firm is a Price Taker S Price Revenue Pe D O O Quantity (thousands) Quantity (millions) (a) Industry (b) Firm

  9. Firm is a Price Taker S Price Revenue Price Line D = AR Pe AR = MR D O O Quantity (thousands) Quantity (millions) (a) Industry (b) Firm

  10. Name The Type of Market ? PERFECT COMPETITION

  11. Perfect Competition • Features • Very large number of buyers and sellers • Homogenous products • Freedom of entry and exit to the industry • Perfect knowledge of market • Perfect mobility of factors of production • Absence of transport costs

  12. Name the Market based on Features

  13. One Seller Large Numbers of Buyers

  14. Restriction on the Entry of New Firms Cartel Formation by Small Firms

  15. Super Normal Profits

  16. Price Discrimination • When the same product is sold at different prices to different buyers

  17. Shape of AR & MR Curves • Downward sloping curves • MR is less than AR Units sold Price TR AR MR 1 5 5 5 5 2 4 8 4 3 3 3 9 3 1 4 2 8 2 - 1 Revenue AR 0 Output MR

  18. Equilibrium Output • Equilibrium price and output • MC = MR MC Supernormal Profits Cost / Revenue AC AR AC AR MR Qm O Q

  19. Name The Type of Market ?

  20. Monopoly • Defining monopoly • Single seller • Large number of Buyers • No close substitutes • Barriers to entry • Super Normal Profits • Price Discrimination

  21. Think of some examples of Monopolies

  22. T H I N K

  23. Imagine You are a CEO of a global software company. How will you decide your price policy? Can price discrimination be made socially desirable?

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