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Market Structure

This document discusses different market structures: 1) Market structure refers to the competitive environment where buyers and sellers operate, including the number of buyers and sellers, product similarities, and knowledge of prices. 2) There are varying degrees of competition depending on factors like the number of buyers and sellers, product similarities, and mobility of resources. 3) Perfect competition is a theoretical market structure with many small buyers and sellers, identical products, easy entry and exit of businesses, and complete information.

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345 views10 pages

Market Structure

This document discusses different market structures: 1) Market structure refers to the competitive environment where buyers and sellers operate, including the number of buyers and sellers, product similarities, and knowledge of prices. 2) There are varying degrees of competition depending on factors like the number of buyers and sellers, product similarities, and mobility of resources. 3) Perfect competition is a theoretical market structure with many small buyers and sellers, identical products, easy entry and exit of businesses, and complete information.

Uploaded by

nestor
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
  • Market Structure Introduction: Introduces the concept of market structure and its importance in the competitive environment.
  • Market Overview: Describes the definition of a market and how buyers and sellers interact within it.
  • Understanding Competition: Explains the concept of competition and its role in crafting marketing strategies.
  • Perfect Competition: Details the characteristics of a perfectly competitive market structure.
  • Imperfect Competition: Discusses the conditions under which market structures deviate from perfect competition.
  • Conclusion: Wraps up the discussion on market structures and their implications.

Market

Structure
Market Structure
- It refers to the competitive environment in which buyers
and sellers operate.
- The selling environment in which a firm produces and sells
its product.
Market
- Is a situation of diffused, impersonal competition among
sellers who compete to sellers their goods and among
buyers who use their purchasing power to acquire available
goods in the market.
- In economics, the term “market” does not mean a
particular place but the whole area where the buyers and
sellers of a product are spread.
There are varying degrees of competition in the
market depending on the following factors:
• Numbers and size of buyers and sellers
• Similarity or type of product brought and sold
• Degree of mobility of resources
• Entry and exit of firms and input owners
• Degree of knowledge of economic agents regarding to prices, costs, demand
and supply conditions
Competition
- Is a rivalry among various sellers in the market.
- Knowing and understanding your competition is a critical
step in designing a successful marketing strategy.
Perfect Competition
- Is a market structure where a large number of buyers and
sellers are present, and all are engaged in the buying and selling
of the homogeneous products at a single price prevailing in the
market.
The Characteristics of Perfect
Competitive Market:
• There are so many buyers and sellers that each has a negligible impact on
market price. Change in output of a single firm will not perceptibly affect
market price of the good. No single buyer can influence the price since
he/she purchases only a small amount. Buyer cannot extract quantity
discounts and credit terms.
• A homogeneous product is sold by sellers, which means the products are
highly similar in such a way consumers will have no preference in buying from
one seller over another. The goods offered for sale are all exactly the same or
are perfectly standardized.
• Perfect mobility of resources refers to the easy transfer of
resources in terms of use or in terms of geographical mobility.

• There is perfect knowledge of economic agents of market


conditions such as present and future prices, costs, and economic
opportunities.

• Market price and quantity or output are determined exclusively by


forces of demand and supply.
Imperfect Competition
- In other markets, one or more of the assumptions of perfect
competition will not be met; thus. The market becomes imperfectly
competitive.
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