2. MARKET STRUCTURE

3. MEANING
 Structure refers to something that organization and
dimension.
 And the market structure refers to the size and
design of the market. It also include the manner of
the operation of the market.

4. DEFINITION
 Market structure refers to those organizational
characteristics of a market which influence the
nature of competition and pricing, and affect the
conduct of business firms.
 Market structure refers to those characteristics of
the market which affect the traders behaviour and
their performance.

5. COMPONENTS OF MARKET STRUCTURE
CONCENTRATION OF
MARKET POWER
DEGREE OF PRODUCT
DIFFERENTIATION
CONDITIONS FOR ENTRY
OF FIRMS IN THE MARKET
FLOW OF MARKET
INFORMATION
DEGREE OF INTEGRATION

6.  It is an important element determining the nature of
competition and consequently of market conduct and
performance.
It is measured by the number and size of firms
existing in the market.
 Restricts the movement of goods between buyers and
sellers at fair and competitive prices.
 Creates an oligopoly or oligopsony situation in the
market.

7. DEGREE OF PRODUCT DIFFERENTIATION
Products are homogeneous, the price variation in the
market will not be wide.
When the products are heterogeneous , firms have the
tendency to charge different prices for their products.
CONDITIONS FOR ENTRY OF FIRMS IN THE MARKET
 Restrictions
 Big firms do not allow new firms to enter the market or make
their entry difficult by their dominance in the market.
 Government restrictions on entry of new firms

8. FLOW OF MARKET INFORMATION
 The buyers and sellers to freely interact with one
another in arriving at prices and striking deals.
DEGREE OF INTEGRATION
 The behaviour of an integrated market will be
different from that of a market where there is no or
less integration either among the firms or of their
activities.

9. DYNAMICS OF MARKET STRUCTURE
MARKET CONDUCT
 Behaviour of firms, specially in relation to pricing and
their practices in adapting and adjusting to the market
in which they function.
Market sharing and price setting policies
Policies aimed at coercing rivals
Policies towards setting the quality of products

10. MARKET PERFORMANCE
 The economic result that flow from the industry as
each firm pursues its particular line of conduct.
Performance and efficiency of the market structure are :
 Use of resources
 Monopoly or monopoly profits
 Size and the number of the firms

11. Market
structure monopomonopoly
Monopolistic
competition
Perfect
competition
Oligopoly
Natural
monopoly
Geographical
monopoly
Government
monopoly
Technological
monopoly
Differentiated
oligopoly
Pure
oligopoly
CHARECTERISTICS OF THE MARKET STRUCTURE

12. PERFECT
COMPETITION
MONOPOLISTIC
COMPETITION
OLIGOPOLY
MONOPOLY
COMPETITION AND MARKET
STRUCTURE
More competition
Less competition
MONOPOLISTIC
COMPETITION
OLIGOPOLY
MONOPOLY
Least control over price

13. CLASSIFICATION OF MARKET STRUCTURE

14. Marketing structure should change
Production pattern
Cost and pattern of
marketing functions
Demand pattern
Technological
change in industry