Date post: | 20-Jan-2015 |
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ECONOM ICS ASSIGNMENT
Consumer behavior and demand
MICROECONOMICS
Forms of market
Forms of market structureForms of market structureimperfect competitionmonopolyMonopolistic competitionoligopolyperfect competitionmonopolyMonopolistic competitionoligopoly
PERFECT COMPETITIONVery large no. of buyers and sellers
Homogeneous product
Free entry and exit of firm
Perfect knowledge
Perfect mobility
AR( demand ) curve parallel to X- axis
No control over price
Absence of transport cost
PERFECT COMPETITION
Under perfect competition, price of a commodity is determined by the interaction of market demand and market supply of the whole industry.
Firm is price taker and industry is price maker.
AR and MR curves in perfect competition
Demand curve in perfect competition
Profit maximizing condition
Price= MR
at equilibrium, MR= MC
MONOPOLY
Single firm
No substitute product
Very difficult entry of firms
Price discrimination
AR curve downward sloping
Great control over price
MONOPOLY
Monopoly is a market situation where there is single firm selling the commodity and there is no close substitute of the commodity sold by the monopolist.
He is price maker.
TR, AR and MR under monopoly
Demand curve in monopoly
Profit maximizing conditionMR= MC and MC Is rising
MONOPOLISTIC COMPETITION
Large no. of firms
Differentiated products
Free entry and exit
Selling cost- ( advertisement cost)
AR curve downward sloping
Some control over price
MONOPOLISTIC COMPETITION
Monopolistic competition refers to a market situation in which there are many firms selling closely related but differentiated products.
AR and MR curves in monopolistic competition
Demand curve and profit maximization in monopolistic competition
OLIGOPOLYFew firms
Homogeneous and differentiated products
Difficult entry of new firms
Selling cost- ( advertisement cost)
AR and MR curve downward sloping
Price rigidity
Indeterminate demand curve
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