A term paper on…

Market structure and pricing

under oligopoly

Submitted To:

Dinesh Dhakal

Assistant professor

Department of Agri-Economics

IAAS

Submitted by:

Bibek Acharya

R-2012-AEC-11-M

August, 2012

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Table of Contents

1. Introduction 3

2. Types of market structures 4

3. Concept of perfect and imperfect market structure 4

3.1. Types of imperfect market 5

4. Market Structure 6

5. Monopoly 7

6. Monopsony 7

7. Oligopoly 8

7.1 Classification of oligopoly 9

7.2 Causes of oligopoly 9

7.3. Characteristics of oligopoly 10

8. Price and Output Determination under Oligopoly 11

9. Collusive Oligopoly 12

10. Price Determination Models of Oligopoly 13

8.1. Kinked Demand Curve: 13

8.2. Price Leadership Model: 15

9. Economic costs of imperfect competition and oligopoly 16

10. Intervention Strategies 17

Conclusion 18

References: 19

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1. Introduction

A market is a place where the sellers of a particular good or service can meet with the buyers of that

goods and services where there is a potential for transaction to take place. The buyers must have

something they can offer in exchange for there to be a potential transaction. Market structure is best

defined as the organizational and other characteristics of a market. It refers to the size and design of the

market. It relates to those organizational characteristics of a market which influence the nature of

competition and pricing and affect the conduct of the business firms. Market structure commonly called

as market is the whole set of conditions under which a commodity is marketed (chopra, 2002). We focus

on those characteristics which affect the nature of competition and pricing – but it is important not to

place too much emphasis simply on the market share of the existing firms in an industry.

The most important features of market structure are:

The number of firms (including the scale extent of foreign competition).

The market share of the largest firms.

The nature of costs including the potential for firms to exploit economies of scale and

also the presence of sunk costs which affects market contestability in the long term.

The degree to which the industry is vertically integrated -vertical integration explains the

process by which different stages in production and distribution of a product are under the

ownership and control of a single enterprise. The extent of product differentiation, which affects

cross-price elasticity of demand.

The structure of buyers in the industry including the possibility of monopsony power.

The turnover of customers – i.e. how many customers are prepared to switch their

supplier over a given time period when market conditions change. The rate of customer churn is

affected by the degree of consumer or brand loyalty and the influence of persuasive advertising

and marketing.

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2. Types of market structures Market structure is commonly known as market and of following types:

1. Monopolistic competition, also called competitive market, where there are a large number of

firms, each having a small proportion of the market share and slightly differentiated products.

2. Oligopoly, in which a market is dominated by a small number of firms that together control the

majority of the market share.

3. Duopoly, a special case of an oligopoly with two firms.

4. Oligopsony, a market, where many sellers can be present but meet only a few buyers.

5. Monopoly, where there is only one provider of a product or service.

6. Natural monopoly, a monopoly in which economies of scale cause efficiency to increase

continuously with the size of the firm. A firm is a natural monopoly if it is able to serve the entire market

demand at a lower cost than any combination of two or more smaller, more specialized firms.

7. Monopsony, when there is only one buyer in a market.

3. Concept of perfect and imperfect market structure

Perfect competition is a theoretical market structure that features unlimited contestability (or no barriers

to entry), an unlimited number of producers and consumers, and a perfectly elastic demand curve.

Drummond & Goodwin (2004) has given the necessary conditions for the existence of perfect condition

market, which are as:

Individual consumer or producer is insignificant in relation to the total market because

there are so many producers and consumers.

Products are homogenous.

No artificial limitations on entry and exit in the market.

The imperfectly competitive structure is quite identical to the realistic market conditions where

some monopolistic competitors, monopolists, oligopolists, and duopolists exist and dominate the

market conditions. Imperfect competition market consists of many market conditions having two sellers

to a large number of buyers and sellers (Chopra, 2006). The elements of Market Structure are: the

number and size distribution of firms, entry conditions, and the extent of differentiation.

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3.1. Types of imperfect market

The four market structures that are technically included in the category of imperfect competition are

monopolistic competition, oligopoly, Monopsonistic competition, and Oligopsony. The first two are the

most noted participants. The second two are often overlooked, but justifiably included. Here in this

paper we are more focused in oligopoly market structure.

Monopolistic Competition: This market structure is characterized by a large number of

relatively small competitors, each with a modest degree of market control on the supply side. A

key feature of monopolistic competition is product differentiation. The output of each producer is

a close but not identical substitute to that of every other firm, which helps satisfy diverse

consumer wants and needs.

Oligopoly: This market structure is characterized by a small number of relatively large

competitors, each with substantial market control. Oligopoly sellers exhibit interdependent

decision making which can lead to intense competition among the few and the motivation to

cooperate through mergers and collusion.

Monopsonistic Competition: This market structure is characterized by a large number of

relatively small competitors, each with a modest degree of market control on the demand side.

Monopsonistic competition represents the demand-side counterpart to monopolistic competition

on the supply side. A key feature of Monopsonistic competition is also product differentiation as

each buyer seeks to purchase a slightly different product.

Oligopsony: This market structure is characterized by a small number of relatively large

competitors, each with substantial market control on the buying side. Oligopsony represents the

demand-side counterpart to oligopoly on the supply side. Oligopsony buyers exhibit

interdependent decision making which can lead to intense competition and the motivation to

cooperate.

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4. Market Structure

Structure

No. of Producers &

Degree of Product

Differentiation

Part of economy

where prevalent

Firm’s degree

Of control over price

Methods of

Marketing

Perfect

competition

Many producers,

Identical products

Financial markets, &

Some agricultural products

None

Market exchange

or auction

Imperfect

competition

Monopolistic

competition

Many producers,

Many real or perceived

differences in product

Retail trade

(Gasoline, PCs, etc.)

Some

Advertising and

Quality rivalry,

Administered prices

Oligopoly

Few producers,

No differences in product.

Steel, chemicals, etc.

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Few producers,

Some differentiation

of products

Autos, aircraft, etc.

Monopoly

Single producer,

Product without close

substitutes

Local telephone,

electricity, and gas

Considerable but usually regulated

Advertising and

Service promotion

5. Monopoly

The term monopoly is derived from Greek words 'mono' which means single and 'poly' which means

seller. So, monopoly is a market structure, where there only a single seller producing a product having

no close substitutes and has complete control over the supply of the commodity. This single seller may

be in the form of an individual owner or a single partnership or a Joint Stock Company. Such a single firm

in market is called monopolist. Monopolist is price maker and has a control over the market supply of

goods. But it does not mean that he can set both price and output level. There is no free entry and exit

because of some restrictions. A monopolist can do either of the two things i.e. price or output. It means

he can fix either price or output but not both at a time. Since there is a single firm, the firm and industry

are one and same i.e. firm coincide with the industry. Monopoly firm faces downward sloping demand

curve. It means he can sell more at lower price and vice versa. Therefore, elasticity of demand factor is

very important for him.

6. Monopsony A market structure characterized by a large number of small buyers, that purchase similar but not

identical inputs, have relative freedom of entry into and exit out of the industry, and possess extensive

knowledge of prices and technology. Monopsonistic competition is the buying-side equivalent of a

selling-side monopolistic competition. Much as a monopolistic competition is a competitive market

containing a number of small sellers, and a number of small buyers. While monopsonistic competition

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could be analyzed for any type of market it tends to be most relevant for factor markets. Two related

buying-side market structures are monopsony and oligopsony.

While the market for any type of good, service, resource, or commodity can, in principle, function as

monopsonistic competition, this form of market structure tends to be most pronounced for the

exchange of factor services.

This market structure is the somewhat obscure and less noted buying counterpart of monopolistic

competition. However, monopsonistic competition tends to be just as prevalent in the real world. In

fact, firms operating as monopolistic competition in an output market often operate as monopsonistic

competition in an input market.

In much the same way the monopolistic competition is a cross between perfect

competition and monopoly, monopsonistic competition is a cross between perfect competition

and monopsony. While each monopolistically competitive buyer has very little market control, it does

have some market control, each has its own little monopsony, each faces an input supply curve that is

relatively elastic but NOT perfectly elastic.

7. Oligopoly

An oligopoly is a market form in which a market or industry is dominated by a small number of sellers

(oligopolists). The word is derived, by analogy with "monopoly", from the Greek (oligoi) "few" + (pólein)

"to sell". Because there are few sellers, each oligopolists is likely to be aware of the actions of the

others. The decisions of one firm influence, and are influenced by, the decisions of other firms. Strategic

planning by oligopolists needs to take into account the likely responses of the other market participants.

Oligopoly is imperfect competition among the few; it applies to an industry that contains only a few

competing firms. Each firm has enough market power to prevent its being a price-taker, but each firm is

subject to enough inter-firm rivalry to prevent it considering the market demand curve as its own. In

most modern economies this is the dominant market structure for the production of consumer and

capital goods as well as many basic industrial materials such as steel and aluminium. Services, however,

are often produced in industries containing a larger number of firms although product differentiation

prevents them from being perfectly competitive. In contrast to a monopoly, which has no competitors,

and to a monopolistically competitive firm, which has many competitors, an oligopolistic firm faces a

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few competitors. Because there are only a few firms in an oligopolistic industry, each firm realizes that

its competitors may respond to any move it makes.

Oligopoly is that market situation in which the number of firms is small but each firm in the industry takes

into consideration the reaction of the rival firms in the formulation of price policy. The number of firms

in the industry may be two or more than two but not more than 20. Oligopoly differs from monopoly

and monopolistic competition in this that in monopoly, there is a single seller; in monopolistic

competition, there is quite a larger number of them; and in oligopoly, there are only a small number of

sellers.

7.1 Classification of oligopoly

The oligopolistic industries are classified in a number of ways:

(a) Duopoly: If there are two giant firms in an industry it is called duopoly. Duopoly is further classified as

below:

(i) Perfect or Pure Duopoly: If the duopolists in an industry are producing identical products it is called

perfect or pure duopoly.

(ii) Imperfect or Impure Duopoly: If the duopolists in an industry are producing differentiated products it

is called imperfect or impure duopoly.

(b) Oligopoly: If there are more than two firms in an industry and each firm takes consideration the

reactions of the rival firms in formulating its own price policy it is called oligopoly. Oligopoly is further

classified as below:

(i) Perfect or Pure Oligopoly: If the oligopolists in an industry are producing identical products it is called

perfect or pure oligopoly.

(ii)Imperfect or Impure Oligopoly: If the oligopolists in an industry are producing differentiated products

it is called imperfect or impure oligopoly.

7.2 Causes of oligopoly

1. Economies of Scale: The firms in the industry, with heavy investment, using improved technology and

reaping economies of scale in production, sales, promotion, etc, will compete and stay in the market.

2. Barrier to Entry: In many industries, the new firms cannot enter the industry as the big firms have

ownership of patents or control of essential raw material used in the production of an output. The heavy

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expenditure on advertising by the oligopolistic industries may also be a financial barrier for the new

firms to enter the industry.

3. Merger: If the few firms in the industry smell the danger of entry of new firms, they then immediately

merge and formulate a joint policy in the pricing and production of the products. The joint action of the

few big firms discourages the entry of new firms into the industry.

4. Mutual Interdependence: As the number of firms is small in an oligopolistic industry, therefore, they

keep a strict watch of the price charged by rival firms in the industry. The firm generally avoids price

ware and tries to create conditions of mutual interdependence.

7.3. Characteristics of oligopoly

Ability to set price: Oligopolies are price setters rather than price takers.

Profit maximization conditions: An oligopoly maximizes profits by producing where marginal revenue

equals marginal costs.

Entry and exit: Barriers to entry are high. The most important barriers are economies of scale, patents,

access to expensive and complex technology, and strategic actions by incumbent firms designed to

discourage or destroy nascent firms. Additional sources of barriers to entry often result from

government regulation favoring existing firms making it difficult for new firms to enter the market.

Number of firms: "Few" – a "handful" of sellers. There are so few firms that the actions of one firm can

influence the actions of the other firms.

Long run profits: Oligopolies can retain long run abnormal profits. High barriers of entry prevent

sideline firms from entering market to capture excess profits.

Product differentiation: Product may be homogeneous (steel) or differentiated (automobiles).

Perfect knowledge: Assumptions about perfect knowledge vary but the knowledge of various

economic actors can be generally described as selective. Oligopolies have perfect knowledge of their

own cost and demand functions but their inter-firm information may be incomplete. Buyers have only

imperfect knowledge as to price cost and product quality.

Interdependence: The distinctive feature of an oligopoly is interdependence. Oligopolies are typically

composed of a few large firms. Each firm is so large that its actions affect market conditions. Therefore

the competing firms will be aware of a firm's market actions and will respond appropriately. This means

that in contemplating a market action, a firm must take into consideration the possible reactions of all

competing firms and the firm's countermoves. It is very much like a game of chess or pool in which a

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player must anticipate a whole sequence of moves and countermoves in determining how to achieve his

objectives. For example, an oligopoly considering a price reduction may wish to estimate the likelihood

that competing firms would also lower their prices and possibly trigger a ruinous price war. Or if the firm

is considering a price increase, it may want to know whether other firms will also increase prices or hold

existing prices constant. This high degree of interdependence and need to be aware of what the other

guy is doing or might do is to be contrasted with lack of interdependence in other market structures. In

a PC market there is zero interdependence because no firm is large enough to affect market price.

(Koutsoyiannis, 1979). All firms in a PC market are price takers, information which they robotically follow

in maximizing profits. In a monopoly there are no competitors to be concerned about. In a

monopolistically competitive market each firm's effects on market conditions is so negligible as to be

safely ignored by competitors.

The demand curve under oligopoly is indeterminate because any step taken by his rivals may change

the demand curve. It is more elastic than under simple monopoly and not perfectly elastic as under

perfect competition.

It is often noticed that there is stability in price under oligopoly. This is because the oligopolist avoids

experimenting with price changes. He knows that if raises the price, he will lose his customers and if he

lowers it he will invite his rivals to price war.

8. Price and Output Determination under Oligopoly

The price and output behaviour of the firms operating in oligopolistic market condition can be studied as:

(a) If an industry is composed of few firms each selling identical or homogenous products and having

powerful influence on the total market, the price and output policy of each is likely to affect the other

appreciably, therefore they will try to promote collusion.

(b) In case there is product differentiation, an oligopolist can raise or lower his price without any fear of

losing customers or of immediate reactions from his rivals. However, keen rivalry among them may

create condition of monopolistic competition.

There is no single theory which satisfactorily explains the oligopoly behavior regarding price and output

in the market. There are set of theories like Cournot Duopoly Model, Bertrand Duopoly Model, the

Chamberlin Model, the Kinked Demand Curve Model, the Centralized Cartel Model, Price Leadership

Model, etc., which have been developed on particular set of assumptions about the reaction of other

firms to the action of the firm under study.

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9. Collusive Oligopoly The degree of imperfect competition in a market is influenced not just by the number and size of firms

but by how they behave. When only a few firms operate in a market, they see what their rivals are doing

and react. ‘Strategic interaction’ is a term that describes how each firm’s business strategy depends

upon its rivals’ business behaviour. When there are only a small number of firms in a market, they have

a choice between ‘cooperative’ and ‘non-cooperative’ behaviour:

Firms act non-cooperatively when they act on their own without any explicit or implicit agreement

with other firms. That’s what produces ‘price wars’.

Firms operate in a cooperative mode when they try to minimise competition between them. When

firms in an oligopoly actively cooperate with each other, they engage in ‘collusion’. Collusion is an

oligopolistic situation in which two or more firms jointly set their prices or outputs, divide the market

among them, or make other business decisions jointly.

A ‘cartel’ is an organisation of independent firms, producing similar products, which work together to

raise prices and restrict output. It is strictly illegal in Pakistan and most countries of the world for

companies to collude by jointly setting prices or dividing markets. Nonetheless, firms are often tempted

to engage in ‘tacit collusion’, which occurs when they refrain from competition without explicit

agreements. When firms tacitly collude, they often quote identical (high) prices, pushing up profits and

decreasing the risk of doing business. The rewards of collusion, when it is successful, can be great. It is

more illustrated in the following diagram:

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The above diagram illustrates the situation of oligopolist A and his demand curve DaDa assuming that

the other firms all follow firm A’s lead in raising and lowering prices. Thus the firm’s demand curve has

the same elasticity as the industry’s DD curve. The optimum price for the collusive oligopolist is shown

at point G on DaDa just above point E. This price is identical to the monopoly price, it is well above

marginal cost and earns the colluding oligopolists a handsome monopoly profit

10. Price Determination Models of Oligopoly 8.1. Kinked Demand Curve: The kinky demand curve model tries to explain that in non-collusive

oligopolistic industries there are not frequent changes in the market prices of the products. The demand

curve is drawn on the assumption that the kink in the curve is always at the ruling price. The reason is

that a firm in the market supplies a significant share of the product and has a powerful influence in the

prevailing price of the commodity. Under oligopoly, a firm has two choices:

(a) The first choice is that the firm increases the price of the product. Each firm in the industry is fully

aware of the fact that if it increases the price of the product, it will lose most of its customers to its

rival. In such a case, the upper part of demand curve is more elastic than the part of the curve lying

below the kink.

(b) The second option for the firm is to decrease the price. In case the firm lowers the price, its total

sales will increase, but it cannot push up its sales very much because the rival firms also follow suit with

a price cut. If the rival firms make larger price cut than the one which initiated it, the firm which first

started the price cut will suffer a lot and may finish up with decreased sales. The oligopolists, therefore

avoid cutting price, and try to sell their products at the prevailing market price. These firms, however,

compete with one another on the basis of quality, product design, after-sales services, advertising,

discounts, gifts, warrantees, special offers, etc.

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In the above diagram, we shall notice that there is a discontinuity in the marginal revenue curve just

below the point corresponding to the kink. During this discontinuity the marginal cost curve is

drawn. This is because of the fact that the firm is in equilibrium at output ON where the MC curve is

intersecting the MR curve from below.

In the above diagram, the demand curve is made up of two segments DB and BD’. The demand

curve is kinked at point B. When the price is Rs. 10 per unit, a firm sells 120 units of output. If a firm

decides to charge Rs. 12 per unit, it loses a large part of the market and its sales come down to 40 units

with a loss of 80 units. In case, the producer lowers the price to Rs. 4 per unit, its competitors in the

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industry will match the price cut. Its sales with a big price cut of Rs. 6 increases the sale by only 40

units. The firm does not gain as its total revenue decreases with the price cut.

8.2. Price Leadership Model: Under price leadership, one firm assumes the role of a price leader and

fixes the price of the product for the entire industry. The other firms in the industry simply follow the

price leader and accept the price fixed by him and adjust their output to this price. The price leader is

generally a very large or dominant firm or a firm with the lowest cost of production. It often happens

that price leadership is established as a result of price war in which one firm emerges as the winner.

In oligopolistic market situation, it is very rare that prices are set independently and there is usually some

understanding among the oligopolists operating in the industry. This agreement may be either tacit or

explicit.

Types of Price Leadership: There are several types of price leadership. The following are the principal

types:

(a) Price leadership of a dominant firm, i.e., the firm which produces the bulk of the product of the

industry. It sets the price and rest of the firms simply accepts this price.

(b) Barometric price leadership, i.e., the price leadership of an old, experienced and the largest firm

assumes the role of a leader, but undertakes also to protect the interest of all firms instead of

promoting its own interests as in the case of price leadership of a dominant firm.

(c) Exploitative or Aggressive price leadership, i.e., one big firm built its supremacy in the market by

following aggressive price leadership. It compels other firms to follow it and accept the price fixed by

it. In case the other firms show any independence, this firm threatens them and coerces them to follow

its leadership.

Price Determination under Price Leadership:

There are various models concerning price-output determination under price leadership on the basis of

certain assumptions regarding the behavior of the price leader and his followers. In the following case,

there are few assumptions for determining price-output level under price leadership:

(a) There are only two firms A and B and firm A has a lower cost of production than the firm B.

(b) The product is homogenous or identical so that the customers are indifferent as between the firms.

(c) Both A and B have equal share in the market, i.e., they are facing the same demand curve which will

be the half of the total demand curve.

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In the above diagram, MCa is the marginal cost curve of firm A and MCb is the marginal cost curve of

firm B. Since we have assumed that the firm A has a lower cost of production than the firm B, therefore,

the MCa is drawn below MCb.

Now let us take the firm A first, firm A will be maximising its profit by selling OM level of output at price

MP, because at output OM the firm A will be in equilibrium as its marginal cost is equal to marginal

revenue at point E. Whereas the firm B will be in equilibrium at point F, selling ON level of output at

price NK, which is higher than the price MP. Two firms have to charge the same price in order to survive

in the industry. Therefore, the firm B has to accept and follow the price set by firm A. This shows that

firm A is the price leader and firm B is the follower.

Since the demand curve faced by both firms is the same, therefore, the firm B will produce OM level of

output instead of ON. Since the marginal cost of firm B is greater than the marginal cost of firm A,

therefore, the profit earned by firm B will be lesser than the profit earned by firm A.

9. Economic costs of imperfect competition and oligopoly:

(a) The cost of inflated prices and insufficient output: The monopolist, by keeping the output a little

scarce, raises its price above marginal cost. Hence, the society does not get as much of the monopolist’s

output as it wants in terms of product’s marginal cost and marginal value. The same is true for oligopoly

and monopolistic competition.

(b) Measuring the waste from imperfect competition: Monopolists cause economic waste by restricting

output. If the industry could be competitive, then the equilibrium would be reached at the point where

MC = P at point E. Under perfect competition, this industry’s quantity would be 6 with a price of

100. The monopolist would set its MC equal to MR (not to P), displacing the equilibrium to Q = 3 and P =

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150. The GBAF is the monopolist’s profit, which compares with a zero-profit competitive

equilibrium. Economists measure the economic harm from insufficiency in terms of the deadweight loss;

this term signifies the loss in real income that arises because of monopoly, tariffs and quotas, taxes, or

other distortions. The efficiency loss is the vertical distance between the demand curve and the MC

curve. The total deadweight loss from the monopolist’s output restriction is the sum of all such losses

represented by the grey triangle ABE:

In the above diagram, DD curve represents the consumers’ marginal utility at each level of output, while

the MC curve represents the opportunity cost of the devoting production to this good rather than to

other industries. For example, at Q = 3, the vertical difference between B and A represents the utility

that would be gained from a small increase to the output of Q. Adding up all the lost social utility from Q

= 3 to Q = 6 gives the shaded region ABE.

10. Intervention Strategies

According to a Nobel Prize winner Milton Friedman, basically there are three choices – private

unregulated monopoly, private monopoly regulated by the government, or the government operation.

In most market economies of the world, the monopolists are regulated by the State. There are several

methods and tools for controlling the power misuse by monopolistic and oligopolistic firms:

1. Anti-trust Policy: Anti-trust policies are laws that prohibit certain kinds of behaviour (such as firm’s

joining together to fix prices) or curb certain market structures (such as pure monopolies and highly

concentrated oligopolies).

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2. Encouraging Competition: Most generally, anticompetitive abuses can be avoided by encouraging

competition whenever possible. There are many government policies that can promote vigorous rivalry

even among large firms. In particular, it is crucial to keep the barriers to entry low.

3. Economic Regulations: Economic regulation allows specialised regulatory agencies to oversee the

prices, outputs, entry, and exit of firms in regulated industries such as public utilities and

transportation. Unlike antitrust policies, which tell businesses what not to do, regulation tells businesses

what to do and how to do.

4. Government Ownership of Monopolies: Government ownership of monopolies has been an approach

widely used. In recent years, many governments have privatised industries that were in former times

public enterprises, and encouraged other firms to enter for competition.

5. Price Control: Price control on most goods and services has been used in wartime, partly as a way of

containing inflation, partly as a way of keeping down prices in concentrated industries.

6. Taxes: Taxes have sometimes been used to alleviate the income-distribution effects. By taxing

monopolies, a government can reduce monopoly profits, thereby softening some of the socially

unacceptable effects of monopoly.

Conclusion The market structure and pricing under different forms of market structures were discussed above.

Perfect competition is a theoretical market structure that features unlimited contestability (or

no barriers to entry), an unlimited number of producers and consumers, and a perfectly elastic demand

curve while the imperfectly competitive structure is quite identical to the realistic market conditions

where some monopolistic competitors, monopolists, oligopolists, and duopolists exist and dominate the

market conditions. The elements of Market Structure include the number and size distribution of firms,

entry conditions, and the extent of differentiation. The four market structures that are technically

included in the category of imperfect competition are monopolistic competition, oligopoly,

monopsonistic competition, and Oligopsony. The first two are the most noted participants. The second

two are often overlooked, but justifiably included.

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References:

Ahuja.H.L.2003.Advanced economic theory:Microeconomic analysis.S Chand and company Ltd.,New

Delhi,India.

Chopra,P.N.2006.Principle of economics.(9th ed.).Kalyani publishers,New Delhi, India.

Drummond.Evan H.and John W. Goodwin.2004.Agriultural Economics.(2nd ed.).Pearson

education,pte.Ltd.,Indian Branch,New Delhi,India.

Hall.R.E.and M.Lieberman.2007.Microeconomics:Principles and application.(4th ed.).Lachina publishing

services.U.S.A.

Koutsoyiannis, A.1979.Modern microeconomics.(2nd ed.).Macmillan Press Ltd,Houndsmill,London.