1. MARKET
STRUCTURE

2. Classification of markets
TIME
PLACE
COMPETITION
IMPERFECT
LOCAL
Very Short Period
COMPETITION
MONOPOLY
NATIONAL
Short Period
INTERNATIONAL
DUOPOLY
Long Period
MONOPOLISTIC
COMPETITION
Very Long Period
OLIGOPOLY
PERFECT
COMPETITION

3. PERFECT COMPETITION
• A theoretical market structure.
• Competition among sellers and buyers prevails in its
most perfect form.
• Single market price prevails for a commodity.
• The industry that most closely resembles perfect
competition - Agriculture.

4. CHARACTERISTICS OF
PERFECT COMPETITION
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Infinite buyers and sellers
Zero entry and exit barriers
Perfect factor mobility
Perfect information
Profit maximization
Homogenous products
Non-increasing returns to scale
Rational buyers
No externalities

5. PRICE DETERMINATION UNDER
PERFECT COMPETITION

6. IMPORTANCE
• Simple & convenient form of market to understand.
• Gives a clear insight to how a market economy
works.
• First step in understanding nature of complex forms
of market structure.
• Ideal form of market under normative grounds.

7. IMPERFECT COMPETITION
• Introduced by Mrs. Joan Robinson and Chamberlin.
• A type of market that does not operate under the
rigid rules of perfect competition.
• Forms of imperfect competition include monopoly,
duopoly, oligopoly, monopolistic competition.

8. OLIGOPOLY
Market structure in which there are few firms producing
either identical products or differentiated products.
“COMPETITION AMONG FEW”

9. FEATURES
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Few sellers
Inter-dependence
High cross-elasticity
Advertising
Constant struggle
Lack of uniformity
Lack of certainty
Price rigidity
Kinked demand curve

10. KINKED DEMAND CURVE
• Increase in price - Elastic
• Decrease in price - Inelastic

11. TYPES OF OLIGOPOLY
• Pure and Differentiated Oligopoly
• Price Leadership

12. COMMON EXAMPLES
• Operating Systems : Apple, Microsoft.
• Gaming Consoles : Nintendo, Sony, Microsoft.
• Confectioneries : Nestlé, The Hershey Company and Mars.
• Indian Telecommunication : Airtel, Vodafone, Idea, Reliance.