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Forms Of Markets – Economics Popular Recent

Project
Economics Project
on Money And
Banking – CBSE
Table of Contents Class 12
0.1. MARKET: December 18, 2019

0.2. CONTENTS:
English Project
0.3. PERFECT COMPETITION:
Work On Rattrap –
0.4. EFFECTS OF FREE ENTRY AND EXIT: Class 12 CBSE
0.5. MONOPOLY COMPETITION: May 20, 2023
0.6. OLIGOPOLY:
Marketing
0.7. CONCLUSION TABLE:
Management Of
0.8. CERTIFICATE:
Biscuits –
0.9. ACKNOWLEDGMENT:
Business Studies
0.10. DOWNLOAD PDF OF THE PROJECT
Project
0.10.1. Download Forms Of Markets – Economics Project PDF December 13, 2021

Project On
MARKET:
Management Of
A set up where two or more parties engage in an exchange of goods, services and the Natural Resources
information is called a market. Ideally, a market is a place where two or more parties are For Class 10
involved in buying and selling. The two parties involved in a transaction are called seller and April 24, 2023

buyer. This Forms of markets economics project will include all the projects guidelines and Marketing
the required titles you need for the completion of the project Management
Project on
Chocolate – Class
12
February 8, 2020
 Market Size:
The market size is directly proportional to two factors:

The number of sellers and buyers.

Total money involved annually.

Market On The Back Of Competition Or Level Of Influence Of Individual Seller On The

Market:

Perfect Competition:

Pure competition is part of the perfect competition.

Imperfect Competition:

Monopoly

Monopolistic Competition

Oligopoly

CONTENTS:
Perfect Competition
1.1 Definition
1.2 Features and Implications

Monopoly
2.1 Definition
2.2 Features & Implication

Monopolistic Competition
3.1 Definition
3.2 Features and Implications

Oligopoly
4.1 Definition
4.2 Features and Implications

Conclusion

Bibliography

PERFECT COMPETITION:
It is a market situation where there was a large number of buyers and sellers selling a similar
product at a single uniform price. The price in this market is set by industry by the free play
of demand and supply. Examples:

Stock Market

Grain Market

Raw Gold Market

Features:
 A large number of Buyers and Sellers: The large number indicates the
ineffectiveness of a single seller or buyer to influence the prevailing market price on its
own as each seller or buyer has an insignificant share in market supply or market
demand.
Implication: The output sold by each firm is minimal as compared to the total
production of all the firms combined. Thus by increasing or decreasing quantity
supplied, a seller cannot effectively market supply as he sells only a small proportion of
market supply. In this way, the firm does not have bargaining power and hence is a
price-taker.

Homogeneous Product: These goods which are identical concerning quality, size,
design, and color are called similar product.
Implication: Uniform price prevails for the products of all the firms in the industry and
these who charge high price loses their customers. These goods also rule out the
possibilities of advertisement and selling costs.

Free Entry and Exit: There is no legal restriction or barrier to entry or exit of firms.
Firms are free to start producing the commodity or to stop production. A firm seeking
profit can enter the market, and any firm suffering losses can exit the market.
Implications: The freedom of entry and exit of firms has an important implication. This
ensures that no firm can earn above-normal profits in the long run.

Perfect Knowledge: Buyers and sellers are fully aware of the price and other market
conditions.
Implication: The firms have all knowledge about the product market and the input
markets, and thus, each firm has equal access to the technology and the inputs used in
the technology. No firm has any cost advantage.

Perfect Mobility of Factors: The resources used in the production process like energy,
labor, raw material can move easily in and out of an industry. There are no artificial
barriers, no natural barriers.
Implication: The market supply of the commodity and FOP is equal in all parts of the
market.

No Extra Transportation Cost: It is assumed that different firms work close to each
other in such a way that there is no transportation cost, and count them as part of the
cost of production

Demand Curve Parallel to X-axis: It means every additional is sold a prevailing price
and hence AR=MR=Perfectly elastic curve. In other words, a firm can sell any quantity
at a price determined by the intersection of market demand and supply

Also, Check – Marketing Management – Fruit Juice

EFFECTS OF FREE ENTRY AND EXIT:

Abnormal Profit or Super Normal Profits in the Short Run:

Suppose market price as given by the industry is high enough such that the firms are making
Abnormal Profit. This will attract new firms. On the one hand, it will lead to more supply
leading to falling in the price of the product. On the other hand, it will lead to more demand
for factors like land, labor, which causes factor prices to rise and consequently higher above
average cost. Thus, the fall in the price of product and rise in AC of production will lead to
falling in Abnormal Profits.

Losses in the Short Run:

Suppose the market price determined by the industry is low enough such that firms are
incurring losses. In the short run, a firm can afford to incur losses but never in the long run.
Hence, in the situation of losses, some existing inefficient firms will quit the industry. Fewer
numbers for firms in the industry will mean less supply and consequently rise in the price of
the product. Thus, the effect of free entry and exit of firms will be zero abnormal profit in the
long-run equilibrium, and there will be no entry or exit.

Pure and Perfect Competition:

Pure competition is part and parcel of the perfect combination, and it is used in a restricted
sense. If the first three conditions are fulfilled, it is pure competition, and when all conditions
are prevailing, it is a cause of perfect competition.

The concept of Pure Competition was given by Chamberlin.

Pure competition is more realistic than perfect competition.

It is a market structure in which there is a single firm selling the commodity, and there are no
close substitutes of the commodity. It is derived from two Greek words, “Monos,” meaning
single and “Poly,” meaning seller.
For Example, McDonald’s, Railways owned by Government, until 1960, Xerox was the only
company to manufacture and sell paper photocopy machines.

Features:

Single Seller and a Large Number of Buyers: There is a single seller of a commodity, and
it may be in the form of a firm, a group of firms, a joint-stock company.
Implication: Since a monopoly produces the industry’s entire output, there is no difference
between firm and industry.

No Close Substitute: The product sold by the monopolist has no perfect substitute.
However, the product may have substitutes like inventor and generator.
Implication: Because the cross elasticity is zero, the consumers have to buy the product
from monopolist or go without it.

Barriers to Entry: There are legal, natural, or technical barriers for entry of new firms so as
to avoid competition and control the supply and hence, the price of the commodity.
Implication: Thus firm is able to earn a supernormal profit in the long run

Full Control Over Price: A monopoly firm is an industry in itself and hence, a price maker. A
monopoly firm earns abnormal profits in the long run.

The possibility of Price Discrimination: A monopolist often charges different prices for
different customers or markets or uses for the same product. This is called Price
Discrimination.
Implication: A monopolist can increase its profit if it is possible to charge different prices
from different markets.

Demand Curve is Downward Sloping: To sell more quantity, a monopoly firm has to
reduce the price of the product in spite of being a price maker.
Implication: The monopolist tries to increase profit by restricting the supply of the product
and fixing high prices. This form of the market goes in favor of the seller.

Also, Check – Economics Project – Inflation CBSE class 12th

MONOPOLY COMPETITION:
It is a market situation that has an element of both perfect competition and monopoly. It is a
mid-way situation between perfect competition and monopoly.

Monopoly + Competition = Monopolistic Competition

For Example, Markets of Soap, Toothpaste, AC, Tea, Cycles.

Features:

A large number of Buyers and Sellers: Each firm acts independently, and each firm has a
limited share of the market, and the size of each firm is small.
Implication: a Large number of firms are in the position to influence the price of its own
product depending upon the popularity of brands.

Freedom of Entry and Exit: The freedom of entry and exit is there, but firms don’t have
absolute freedom to entire into the industry as some firms are legally patented and carry a
brand name.
Implication: All firms earn a normal profit in the long run.

Product Difference: It refers to differentiate the product on the basis of brand, size, color,
shape, etc.
Implication: A high degree of it increases the demand for the product and enables the firm
to charge a price higher than its competitor’s products.

Selling Cost: They are the expenses that are incurred for promoting sales or for inducing
customers to buy the good of a particular brand.
Implication: It creates artificial superiority in the minds of the consumer.

Lack of Perfect Knowledge: Due to a large number of buyers and product differentiation, it
is not possible to compare the prices of different products, and thus, buyers are not fully
aware of the prices.

Non-Price Competition: Monopolistic firms generally don’t disturb the price of the product,
and they attract customers by giving gifts, services, coupons, and other attractive prizes.

Downward Sloping Demand Curve: It means to sell more. A firm has to reduce the price
due to the availability of close substitutes. It is more elastic or flatter than the demand curve.

Less Mobility: There is no perfect mobility of factor owners as FOP are not fully aware of
prices being paid by different firms to factory owners for their services.
OLIGOPOLY:
Oligopoly is a market situation with only a few sellers. The oligopoly is derived from the
Greek words ‘Oligo,’ which means few and ‘Poly’ means to Control.

Example: 1. Airlines 2. Automobile Producers 3. Insurance Sector, Steel.

Features:

Few Sellers and Many Buyers: It is a market structure in which few firms dominate the
industry. Example: Maruti, Hyundai, Tata.
Implication: Each firm commands a significant share of the market and thus can impact the
market price of the product.

Homogeneous Product: Firms in the Oligopolistic Industry may produce either

homogeneous products.

Mutual Interdependence: Away an important feature of oligopoly is mutual

interdependence means that firms are significantly affected by each other’s price and output.
Implication: It leads to a price war as if one firm lowers the price, its own sales will increase,
at the sales of other firms in the industry decrease.

Advertisement: An oligopoly firm has to incur any expenditures for the advertisement. The
expenditure on the advertisement is aimed primarily at shifting the demand in favor of the
advertised product.

The existence of Price Liquidity: The term price rigidity means that firms would not look to
change the prices. It will stick to its price.

Barriers to Entry: Usually, an oligopolistic firm is also characterized by barriers to entry and
exit in the industry. Some common barriers to entry are economies of scale, absolute cost,
and patent rights.

No Price Competition: Same as point number of monopolistic competition.

Indeterminate Firm’s Demand Curve:

Innovations

Controls of an essential resource

Successful differentiation

High fixed costs

Mergers

Patents

Cartel

Anti-Invest legislations

CONCLUSION TABLE:

CERTIFICATE:
This is to certify that the project report is the outcome of my own efforts and my industries. To
other words, publications have been duly acknowledged at the relevant places. This project
is made as per the guidelines issued by CBSE.
Teacher’s Signature

Examiner’s Signature

ACKNOWLEDGMENT:
I would like to express my special thanks of gratitude to my teacher as well as my principal,
who gave me the opportunity to do this wonderful project on the TOPIC – Forms of Market,
which also helped me in doing a lot of research, and I came to know about so many things. I
am really thankful to them. Secondly, I would also like to thank my parents and friends who
helped me a lot in finalizing this project within the limited time frame.

DOWNLOAD PDF OF THE PROJECT

Password: hscprojects.com

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4 Comments

Ana says:
July 8, 2020 at 8:49 am
Very good
Reply
Hifza Suleman says:
October 1, 2020 at 4:38 pm
Thank you very much
Reply
haniya says:
February 16, 2021 at 3:14 pm
You help a lot thank you very much
Reply
Vipin kumar says:
June 18, 2022 at 11:35 am
Thank you so much
Reply

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