ECONOMICS FOR MANAGERS
UNIT- 3
Market Structure-Perfect Competition-
Shut down Point- Monopoly- Economic
Inefficiency of Monopoly- Monopolistic
Competition – Oligopoly.
, Market Structure and pricing
• Generally the ‘market’ has come to signify a public place in which
goods and services are bought and sold. It is the act or technique of
buying and selling.
• The term market does not mean shops or establishments. In economics
it has no reference to a place, but to a commodity which is being
bought and sold. For instance, cotton or wheat market covering not a
single region but the entire world. The term market should imply
certain things:
1. There should be buyers as well as sellers (producers) of the
commodity.
2. The establishments of contract between the buyers and sellers is
essential for the market; otherwise there will not be a market.
3. The buyers and sellers deal with the same commodity or variety.
4. There should be a price for the commodity bought and sold in the
market. The price need not be a fair price, high price or low price.
, Classification of Markets
• Based on the extent of the market for any
product, markets can be classified into,
1. Local markets
2. Regional markets
3. National markets
4. International markets
, Size of the market
• The extent or the size of the market depends
on two important factors, viz.,
1. The Nature of commodity
2. External factors or conditions
UNIT- 3
Market Structure-Perfect Competition-
Shut down Point- Monopoly- Economic
Inefficiency of Monopoly- Monopolistic
Competition – Oligopoly.
, Market Structure and pricing
• Generally the ‘market’ has come to signify a public place in which
goods and services are bought and sold. It is the act or technique of
buying and selling.
• The term market does not mean shops or establishments. In economics
it has no reference to a place, but to a commodity which is being
bought and sold. For instance, cotton or wheat market covering not a
single region but the entire world. The term market should imply
certain things:
1. There should be buyers as well as sellers (producers) of the
commodity.
2. The establishments of contract between the buyers and sellers is
essential for the market; otherwise there will not be a market.
3. The buyers and sellers deal with the same commodity or variety.
4. There should be a price for the commodity bought and sold in the
market. The price need not be a fair price, high price or low price.
, Classification of Markets
• Based on the extent of the market for any
product, markets can be classified into,
1. Local markets
2. Regional markets
3. National markets
4. International markets
, Size of the market
• The extent or the size of the market depends
on two important factors, viz.,
1. The Nature of commodity
2. External factors or conditions
