ECONOM ICS ASSIGNMENT

Consumer behavior and demand

MICROECONOMICS

Forms of market

Forms of market structureForms of market structureimperfect competitionmonopolyMonopolistic competitionoligopolyperfect competitionmonopolyMonopolistic competitionoligopoly

PERFECT COMPETITIONVery large no. of buyers and sellers

Homogeneous product

Free entry and exit of firm

Perfect knowledge

Perfect mobility

AR( demand ) curve parallel to X- axis

No control over price

Absence of transport cost

PERFECT COMPETITION

Under perfect competition, price of a commodity is determined by the interaction of market demand and market supply of the whole industry.

Firm is price taker and industry is price maker.

AR and MR curves in perfect competition

Demand curve in perfect competition

Profit maximizing condition

Price= MR

at equilibrium, MR= MC

MONOPOLY

Single firm

No substitute product

Very difficult entry of firms

Price discrimination

AR curve downward sloping

Great control over price

MONOPOLY

Monopoly is a market situation where there is single firm selling the commodity and there is no close substitute of the commodity sold by the monopolist.

He is price maker.

TR, AR and MR under monopoly

Demand curve in monopoly

Profit maximizing conditionMR= MC and MC Is rising

MONOPOLISTIC COMPETITION

Large no. of firms

Differentiated products

Free entry and exit

Selling cost- ( advertisement cost)

AR curve downward sloping

Some control over price

MONOPOLISTIC COMPETITION

Monopolistic competition refers to a market situation in which there are many firms selling closely related but differentiated products.

AR and MR curves in monopolistic competition

Demand curve and profit maximization in monopolistic competition

OLIGOPOLYFew firms

Homogeneous and differentiated products

Difficult entry of new firms

Selling cost- ( advertisement cost)

AR and MR curve downward sloping

Price rigidity

Indeterminate demand curve

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