market in microeconomics
TRANSCRIPT
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Welcome to Presentation
Md. Marufur Rahman
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ROAD MAP:• DEFINITION OF MARKET
• FEATURES OF MARKET
• MARKET STRUCTURE
• FEATURE OF COMPETITIVE MARKET & MONOPOLY MARKET
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WHAT IS MARKET?Generally market is the place where buyers and sellers are physically present and finalize the transaction.
Prof Stonier and Prof Hague:-
By a market economist mean any organization whereby buyers and sellers of a goods are kept in close touch with each other.
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FEATURE OF MARKET:• Buyers and Sellers:- Buyers and Sellers are must for
market. In Transaction Physical Presence is not necessary.
• One Area:- Denote to a area or a region in which no of buyers and sellers are scattered. They are connected with one another via brokers, agents, letters. Etc.
• One Commodity:- For the existence of a market there should be at least one commodity like Wheat, vegetables, etc and the market is termed as wheat market, vegetables market and so on.
CONT…
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CONT…
• Perfect Competition:- According to Prof. Coornot, market must posses the characteristic of perfect competition where in buyers and sellers are free to enter in the market.
• One Price:- In Perfect competition between buyers and sellers. The market area should have one price only.
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MARKET STRUCTURE:
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PERFECT COMPETITION:
A market form where there are many firms that sell a certain homogenous product.
A single firm can not influence the market price.
It is a hypothetical situation; it cannot exist in real case scenario. In this nobody can influence the prices, including
buyers and sellers
Example: Foreign exchange markets, Rural agricultural markets.
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Features of Perfect Competition:
a large number of sellers and buyers
having homogenous product and
there is single price in the market
Freedom of Entry and Exit; this will require low sunk costs.
All firms are price takers, Therefore firm’s demand curve is
perfectly elastic.
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Perfect Competition Curves:
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MONOPOLY:
• A market situation where there exists a single seller selling such a good which has no close substitutes.
• They are the PRICE SETTERS.
• A single seller exists for a product. i.e. 100% of market share.
• Example: Bangladesh railways, Bangladesh post office
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Features of Monopoly
• Single seller• Large number of buyers• No close substitutes• Price discrimination• No selling costs• Relatively inelastic demand curve• AR>MR• AR&MR curves are downward sloping• No free entry and exit of firms
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Monopoly Curves
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