WELCOME

TO
THIS
PRESENTATION

PRESENTATION
ON
MARKET
STRUCTURE
By
Md. Ashikollah
ID:
51427032
th

Market Structure
Market structure identifies how a market
is made up in terms of:
The number of firms in the industry
The nature of the product produced
The degree of monopoly power each firm has
The degree to which the firm can influence price
Pricing strategies
Barriers to entry and exit.

Types of Market Structure

. Perfect Competition
. Monopolistic
Competition
. Oligopoly
. Monopoly

Types of Market Structure

Competition and the Market Structure

Price Control and the Market Structure

Perfect Competition
Large number of buyers and sellers no individual seller
can influence price
Perfect information available to buyers and sellers
Sellers are price takers have to accept the market price
Homogenous product identical so no consumer
preference and The products of all firms are perfect
substitutes
Example-Agricultural products

Free entry and exit to industry

Perfect Competition

Pricing Strategy :
Going Rate Pricing
Competitor Indexing
Penetration Pricing

Monopolistic Competition
Monopolistic-Many buyers and sellers
Products differentiated only due to
branding
Each firm may have a tiny monopoly
because of the differentiation of their
product
Firm has some control over price
Relatively free entry and exit
Examples Restaurants, Retailing etc

Monopolistic Competition

Pricing Strategy:
Psychological Pricing
Penetration pricing
Premium pricing

Oligopoly
Oligopoly Competition amongst
the few
Industry dominated by small number of large
firms
Many firms may make up the industry
Products could be highly differentiated
branding or homogenous
Nonprice competition
High degree of interdependence between firms
High barriers to entry

Oligopoly
Pricing Strategy :

Competitor Indexing
Cost-Plus pricing
Differential pricing
Loss Leadership Pricing
Product Bundling
Predatory pricing

Oligopoly
The barriers to entry are:
1. Natural

Scale economies
Patents
Technology
Name Recognition

2. Strategic Action
Flooding the market
Controlling an essential input

Oligopoly
Examples of oligopolistic structures:
Supermarkets
Banking industry
Chemicals
Oil
Medicinal drugs
Broadcasting

Monopoly
Monopoly Single seller
A large number of buyers
Product does not have any close substitute
Firm controls price OR output/supply
Abnormal profits in long run
Possibility of price discrimination
Consumer choice limited
Prices in excess of MC
High barriers to entry

Monopoly
Example of
MonopolyElectricity ,Railway

Pricing Strategy :
Cost-Plus Pricing strategy
Price Skimming
Value-based pricing

Monopoly
Barriers to entry
Control of Inputs
Economies of scale
Patents
Licenses/Franchises
Barrier to Exit
Government intervention

Any Question?

Thank You