Unit 8 Nature of markets and Pricing of Products I
Structure 8.1 Introduction Objectives 8.2 Meaning of market and market structure 8.3 Kinds of markets 8.4 Perfect competition 8.5 Monopoly 8.6 Monopolistic competition 8.7 Oligopoly 8.8 Duopoly 8.9 Bilateral monopoly 8.10 Monopsony 8.11 Duopsony 8.12 Oligopsony 8.13 Industry analysis 8.14 Summary 8.15 Terminal Questions 8.16 Answer
Efficiency of management lies in its capacity to analyze the market. Study of demand and supply, its determinants, elasticity of demand and supply, market equilibrium, basic concepts of production function, revenue analysis, pricing policies and pricing methods help in analyzing the market in a more pragmatic manner. Knowledge of market structure and different kinds of markets is of utmost importance to a business manager in taking right decision and planning business activities efficiently. Learning Objectives: After studying this unit, you should be able to 1. Analyze the market with respect to a competitive situation 2. Differentiate between different types of market structures 3. Explain how firms under different market situations maximize their out put. 4. Make realistic estimates of profit maximization 5. Examine how Price discrimination can be applied 6. Know the working of oligopoly in practice
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8.2 Meaning of Market and Market Structure
Market in economics does not refer to a place or places but to a commodity and also to buyers and sellers of that commodity who are in competition with one another e.g., the cotton market may not be confined to a particular place, but may cover the entire country and, in fact, even the entire world. Buyers and sellers of cotton may be spread all over the world. Market situation varies in their structure. Market structure refers to economically significant features of a market, which affect the behavior, and working... [continues]
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