Forms of Market

JITHIN K THOMAS

Market

Market

Market

Features of Market

• Commodity• Competition• Area• Existence of buyers and sellers• One price

Classification of Markets

• Base on Area– Local market– Regional market– National Market– International

• Basis of time– Short period– Long period– Spot market

On the Basis of Competition

MarketPerfectly

Competitive

Perfect Competition

Pure Competition

Imperfectly Competitive

Monopoly Duopoly Oligopoly Monopolist Competition Monopsony

Perfect Competitive Market

• Features– Free and perfect competition– Large number of sellers– Large number of buyers– Homogenous Product– Free entry and exit– Perfect Knowledge– Perfect mobility of factors of production– Lack of transport cost– No selling cost

Pure Competition

• Large number of sellers• Large number of buyers• Homogenous Product• Free entry and exit• Independent decision making

Monopoly

• Single seller and large number of Buyers• No Close substitute• Firm is the Industry• Barriers on entry of new firms• Producer is price maker

Duopoly

• Two large producers• Uncertainty • Homogeneous as well as differentiated

products• Moves and counter moves

Monopolistic Competition

• Monopolistic Competition is found in the industry where there is a large number of small sellers selling differentiated but close substitute products.

Monopolistic Competition

1. Large number of buyers and sellers2. Free entry and exit of firm3. Product differentiation4. Selling cost5. Lack of perfect knowledge6. Less mobility7. More elastic demand8. Non price competition9. Absence of collective action10. Price policy of a firm

Oligopoly

• Few firms• Large number of customers• Monopoly Power• Interdependence of Firms• Price/ Non price competition• Nature of product

Monopsony

• Only one buyer

Bilateral Monopoly

• One buyer• One Seller

Factors affecting the extent of Market

• Nature of demand• Durability• Portability• Grading• Adequate supply• Substitutes• Transportation and communication• Banking and credit facility• Peace and security• Govt. Policies