Presented by

Asim AnsariMudassar KasimiHarshal KirtaneAbdul GafurAsif SyedFazal Shaikh

What is market?

Types of Market structure1.perfect competetion2.monopoly3.Monopolistic competition4.oligopoly

Perfect competition

Many buyers many sellers ,too small to effect the price of a product.

The product is homogeneous.There is perfect mobility of

resources.

oligopoly

Few sellers of a homogeneous or a differentiated product.

Entry possible but not easy.

Monopolistic competitionThere are many sellers of

differentiated product.Entry and exit is easy in the long

run.

Monopoly

Monopoly is a market situation in which there is only one producer of the commodity with no close substitutes.

A monopolist is a price maker.Either the ouput or price can be

fixed but not both.

1. One Seller and Large Number of Buyers

2. Restrictions on the Entry of the New Firms

3. No Close Substitutes4. Full Control Over Price5. Possibility of Price

Discrimination

FEATURES OF MONOPOLY

Dm

Q Q1

P

P1

O X

Y

Quantity

Price

Dm = Demand Curve for a Monopoly firm

DEMAND CURVE FOR A MONOPOLY FIRM

Size of the market

Individualities of inputs

Controlling of crucial raw materials

Control over intellectual property

It is the practice of charging different prices for the same product

Forms of price discrimination: <1>Personal <2>use of trade

A price maker not a price takerAbsence of Competitive

AdvertisementAbsence of close substituteComplete control of market

Higher pricesLack of choiceLoss of Product Quality

To avoid price discriminationTo avoid compromise with the product QualityTo bring competition so that people get more choices to buy productTo give equal chance to every organization

Government interventionOther Fears to monopolists Fear of potential rivals Fear of Government regulators Fear of normalization Fear of Public reaction Fear of Boycott Fear of Substitutes Differences in Elasticities of Demand

1) Remove restrictive trade practices & fix high prices

2) Remove unfair Competition3) Restrict the control of very large share of

market4) Prevent unfair price discrimination5) Restrict mergers to avoid market

domination

O M

B

A

Q

K

P

F

E

MC

OUTPUT

PR

ICE

& C

OS

T

AC

D/AR

Government imposes price ceiling through regulating Authority,and fixes Price belowthe monopoly price

W

S

By levying Lump-sum Tax the Government Can reduce or even monopoly profits