2. IN ALL MARKETS PRICES
CHANGE WITH
VARYING FREQUENCY
“Search” : when the Buyer
(or seller) would find the most
favorable price canvass
various sellers (buyers)
3. DISPERSION
DISPERSION PRICE
PRICE
GOODS
• MANISTATION • IN ALL TYPE OF • SERCH PRICE
OF THE GOODS HAVE YIELD
“IGNORANCE” DIMINISHING
MARKET
• BY EXPECTED
• ALSO IN REDUCTION IN
• NEVER HOMGENEUS MINUM ASK-
ABSOLUT GOODS PRICE
HOMGENITY IN
THE COMODITY • EXPECTED
SAVING MORE
WHEN THE
DISPERSION
PRICE ARE
MAXIMUM
4. COST OF OPTIMUM UNIQUE
SEARCH AMOUNT SERCH GOODS
• PROPORTIONAL • COST OF • EFFICIENCE
NUMBER SERCH IS SEARCH BULLER
SELLERS EQUAL TO –SELLER IS
MARGINAL VERY LOW
• MORE SELLER RETURN • THE POTENTIAL
MORE SELLER NO
EXPENSIVE KNOWN THE
SERCH BECAUSE COST OF
MORE SEARCH
DISPERSION DIVIDES BY THE
PRICECE RACTION OF
POTENTIAL
BUYERS
5. ADVERTISING
MODERN METHOD OF ADVERTISING
IDENTIFYING BUYERS IDENTIFICATION
AND SELLER (BUYERS & SELLERS)
REDUCES
DRASTICALLY THE
COST OF SEARCH
7. SERCH DETERMINANTS
UNIQUE PURCHASE: ASKING PRICES ARE
PURCHASES ARE UNCORRELATED IN
SUCCESSIVE TIME PERIOD
REPETITIVE
SAVINGS FROM SEARCH
INITIAL SEARCH IS WILL PERTAIN ONLY TO
THE ONLY ONE THAT THAT PERIOD
NEED BE UNDERTAKE
ASKING PRICES OF SEARCH IN EACH PERIOD
DEALERS IN IS INDEPENDENT OF
SUCCESSIVE TIME PREVIOUS EXPERIENCE
PERIODS IS PERFECT
THE FUTURE
SAVINGS EXTENDING CORRELATION OF
OVER THE LIFE OF SUCCESSIVE PRICES
THE BUYER OR CUSTOMER SEARCH IS POSITIVE
WILL BE LARGER IN
SELLER
THE INITIAL PERIOD
THAN IN SUBSEQUENT
PERIOD
8. GOODWIL:
CONTINUED
POSITIVE PATRONAGE BY
HOMOGENEOUS
CORRELATION CUS- TOMERS
PRODUCTS
PRICE WITHOUT
CONTINUED
SEARCH
9. SOURCE OF DISPERSION:
THE COST OF DEALER TO KNOW THE ASKING RIVAL PRICE
.
COST OF
THE IGNORANCE COLLECTION OF
DISPERSION OF TO CHANINGING INFORMATION IS
PRICES IS IDENTITY OF INDE- PENDENT
BUYERS-SELLERS. DISPERSION OF ITS USE
CONTINUOS
BECAUSE THE WILL ALSO TENDENCY
BECAUSE FLOW A NEW VARY: THE SIZE TOWARD
KNOWLEDGE BUYER IN EVERY MONOPOLY IN
OF THE MARKE
PRICE BECOMES MARKET THE PROVISION
OBSOLETE WITHOUT OF
INFORMATION INFORMATION
OF COMERCE
10. ADVERSTING: METHOD OF PROVIDING POTENTIAL
BUYERS WITH KNOWLEDGE IDENTITY OF SELLER
NECESARY IDENTIFICATION SELLER: SELLERS
CHANGES OVER TIME, BUT MUCH MORE BECAUSE
OF THE TURNOVER OF BUYERS
BUYER WHO HAVE MORE INFOMATION /
COMMODIT SERCH MORE
THE PROBLEM OF ADVERSTING IS THE BUYER PAY
THE ADVERSTING PRODUCT PRICE. ITS DIFICULT
INSERT “FREE” ADVERSTING BY THE SELLER.
THE SELLER COULD SERCH AND FIND THE SELLER
WITHOUT ADVERSITNG COST PRODUCTOAND BUY
MORE CHEPPER THAT PRODUCT
11. CONCLUSIONS…
IDENTIFICATION SELLER &
THEIR PRICE ITS THE
IMPORTANT ROLE OF SERCH
INFORMATION
SOME ECONOMICS
ORGANISATION WORK FOR
ELIMINATING UNCERTAINTIES IN
QUALITY. IT’S THE VALUE OF THE
TRADE MARK “REPUTATION”
THE UNDERSTANDING OF
ECONOMIC LIFE WILL BE
INCOMPLETE IF NOT ACCONT
WITH THE IGNORANCE PRICE