market for economics
TRANSCRIPT
WELCOME TO OUR PRESENTATION
MARKET
VERSATILEGRO UP MEMBERS
Md. Maruful Haque 13143101158
Md. Masum Billa Faysal
13143101172
Md. Ashiq Mia 13143101174
Md. Bayazid Rahman 13141101175
INTRODUCTION OF MARKET
Market is an Institutional arrangement where buyers and sellers meet to purchase
and sell goods and services.
There are some types of Market. These are :
Perfect Competitive Market
Monopoly Market
Monopolistic Market
Duopoly Market
Monopsony Market
Oligopoly Market
FEATURES OF PERFECT COMPETITIVE MARKET
Many buyers and Many sellers
Products are Homogenous
Buyers and sellers are well informed about market prices
No one can influence the prices
Free entry or exit
No market power
Examples : Lux
FEATURES OF MONOPOLY MARKET
Many buyers but single sellers
Product is Heterogeneous
No close substitutes
Barriers to entry
Examples : Electricity, Wasa
FEATURES OF MONOPOLISTIC MARKET
Many buyers and Many sellers
Products are Differentiated But not Homogenous
Close substitutes are available
Free entry or exit
THREE POSSIBLE OUTCOMES OF A FIRM UNDER PERFECT COMPETITION
Abnormal profit or Super normal profit or Economic profit [ TR>TC, TR-
TC>0 ]
Economic loss [ TR<TC, TR-TC <0 ]
Normal profit [ TR=TC, TR-TC =0 ]
SUPER NORMAL PROFIT
TR=P.Q=OPTQ
TC=P1.Q=PI.Q=0QRP1 Profit: Super normal profit
=TR-TC=OPTQ-OQRP1=PTRP1
ECONOMIC LOSS
TR=P.Q=0PTQ
TC=AC.Q =P2.Q =0P2RQ
LOSS=TC-TR =OP2RQ-OPTQ =PTRP2
NORMAL PROFIT
TR=P.Q=0PTQ
TC =AC.Q =TQ =0PTQ
Normal profit=TR-TC
= OPTQ- OPTQ
= 0
SHUT DOWN POINT OF A FIRM UNDER PERFECT COMPETITION
Fixed cost
Variable cost [related production]
ATC=AFC+AVC
AFC=ATC-AVC
MONOPOLY MARKET
Profit maximizing condition of monopoly market :
MR=MC
P>MR=MC
TR=PM.QM=0PMTQM
TC=AC.Q =P1.Q=P10QMS
=TR-TC
=0PMTQM-P10QMS
=P1PMTS
MONOPOLISTIC COMPETITION
Profit maximizing condition of monopolistic firm :
MR=MC
P>MR=MC
TR=P.Q =0PTQ
TC=ATC.Q =0P1KQ
Profit=TR-TC
=0PTQ-0P1KQ
=P1PTK
LONG RUN
TR=P.Q
=0PTQ
TC=AR.Q =P.Q = 0PTQ
Normal profit = TR-TC
=0PTQ-0PTQ
= 0
Thank you