ENGINEERING ECONOMICS

AND MANAGEMENT-: CREATED BY :- KAVIN RAVAL141080106026

CIVIL

CONCEPTS OF MARKET

MARKET

MARKET• Meaning of market

• Types of markets

1. Perfect competitive market2. Monopoly market3. Monopolistic market4. Oligopoly market

PERFECT COMPETITIVE MARKET

• The market in which a large number of suppliers compete with each other to satisfy the wants and needs of a large umber of consumers at competitive price.

• Conditions for Perfect Competitive Market:1) Many buyers and sellers2) Low entry barriers for sellers3) Cost of producing goods almost same4) Goods offered by various sellers are same

PERFECT COMPETITIVE MARKET

PRICE DETERMINATION Price

Quantity

Market supply

Price is fixed

Market demand

Law of demand and supply

PERFECT COMPETITIVE MARKET

• Effect of market price profit and loss…Cost per unit

Quantity

Marginal cost

Average total cost

Marginal revenue

MONOPOLY MARKET• The market in which the firm is the sole seller of a product without close

substitute

• Characteristics of Monopoly market.

1) Only one seller and other are buyers.2) Monopoly resources are impossible or difficult to get. Thus the entry

barrier is high for competitors 3) Buyers have no control over the price of the product.

MONOPOLY MARKET

Price

Demand

Marginalrevenue

Marginal cost

Average total cost

Quantity

• Price determination

MONOPOLISTIC MARKET• A market structure in which many firms sell products that are similar

but not identical.

• Characteristics of Monopolistic Market:

1) Product are similar not identical2) Number of sellers are more compared to monopoly market3) No barrier for entry exit in market

MONOPOLISTIC MARKETPRICE

Output

Marginal cost

Average total cost

DemandMarginal revenue

Average total cost

OLIGOPOLY MARKET• Number of suppliers are more compared to monopoly market for same

product , new type of market is developed which is neither competitive nor monopoly.

• Here, there will be competition among suppliers for same product but there will not be stiff competition such as in case of perfect competitive market due to less number of suppliers.

• This type of market is called oligopoly market.

OLIGOPOLY MARKET• Price determination

Combination of perfect competitive market and monopoly market.

By the group of suppliers . Known as Cartel.

Not for long term.

Perfect conclusion of sellers is required.

ANY QUESTIONS ?