market structure
DESCRIPTION
MARKET STRUCTURE. 市場結構. MARKET STRUCTURE. 市場結構. Sit Hung, Winnie (s980427). Law Chi Hang, Jarvis (s981093). Chei Wing Yee, Aggie (s981747). Group 10 [ Major: Economics ]. Concept Tour. What is a. “ M A R K E T ” ?. Too Simple !. What is a. “ M A R K E T ” ?. - PowerPoint PPT PresentationTRANSCRIPT
Sit Hung, Winnie
(s980427)
Law Chi Hang, Jarvis
(s981093)
Chei Wing Yee, Aggie
(s981747)
Group 10 [ Major: Economics ]
Concept TourConcept Tour
Perfect Competition完 全 競 爭
Monopoly壟 斷
Oligopoly寡 頭 壟 斷
Monopolistic Competition壟 斷 性 競 爭
Imperfect Competition不 完 全 競 爭
Market Structure 市 場 結 構
Market 市 場
What is a “MARKET” ?
What is a “MARKET” ?In Economics, a Market is defined as a context in which exchange of goods and services between sellers and buyers takes place.
A Market exists whenever a transaction is made.
Four features:
1. Large No. of Buyers & Sellers
2. Homogeneous Products
3. Free Entry & Exit
4. Perfect Market Information
Large No. of Buyers & Sellers
• the action of an individual buyer or seller is unable to affect the market price
Buyers Sellers
Homogeneous Products
• the products in the market must be identical in the eyes of consumers
Free Entry and Exit
• Firms are free to entry or leave the market
Welcome toPerfectly Competitive Market
Exit!!Entry!!
Perfect Market Information
• Buyers & Sellers know all market information about goods e.g.
Price Quality Quantity
Example:
• The stock exchange is a close example
Four Features:
• 1. Large No. of Buyers & Sellers
• 2. Differentiated Products
• 3. Free Entry & Exit
• 4. Imperfect Market Information
Same as P.C.
Same as P.C.
Product Differentiation
• A firm can use product differentiation to promote sales.
Techniques are:•new designs•advertising•branding
Imperfect Information of the Market
• Sellers & Buyers don’t have perfect info. on price & quality of goods
Example:
• Rice is an example
Four features:
1. A Few Dominant Sellers
2. Similar but Differentiated Products
3. Entry is Restricted
4. Imperfect Market Information
Same as P.C. & M.C.
Few dominant sellers• Oligopolies has to consider the reactions
of other firms before making any decision
• price rigidity• price leadership• non-price competition
• Market behavior:
Similar but Differentiate Products
• the products are close substitutes to one another
Entry is Restricted
• it is difficult because of government regulation/huge capital/technological requirements
Imperfectly Competitive MarketEntry?
Examples
Same as M.C. & O.
Four Features:
1. Only One seller in the whole market
2. No close subsitiute
3. Highly Difficult (even impossible) to Entry
4. Imperfect (highly restricted) Market Information
Only One Seller in the Whole Market
• buyers can obtain the goods or services from monopoly only
No Close Substitutes
• buyers are difficult to find another goods to satisfy the same want
Highly Difficult (even impossible) to entry• it is because of monopoly power
Sources of Monopoly Power• government ownership• government franchise• ownership of important resources• huge capital requirement• economies of scale
No Entry!!
• Examples
Monopoly Oligopoly Monopolistic Perfect
Competition Competition
1. No. of sellers
2. No. of buyers
3. Products nature
4. Ease of entry
5. Information availability
One
Many
No close substitute
Forbidden Restricted
RestrictedRestricted
Easy to enter
Perfect Information
Many Many Many
Easy to obtain
Free entry
Heterogeneous Heterogeneous Homogeneous
A few dominant sellers
Many Many