Академический Документы
Профессиональный Документы
Культура Документы
|
2
©
2
!"
MARKET STRUCTURE
PRICE
Market
Structure Competitive
OUTPUT Environment
PRODUCTS
Current &
PERFECT, Prospective BUYE SELLE
IMPERFECT Buyers & RS RS
COMPETITION Sellers
MONOPOLY X PERFECT Nature of products
COMPETITION etc.
COMPETITION IN MARKET
Market
Perfect Imperfect
Competition Competition
MONOPOLY
DUOPOLY
OLIGOPOLY
MONOPOLISTIC
COMPETITION
COMPETITION IN GLOBAL
ECONOMY
VDomestic firms in most industries face a great deal of
competition from abroad.
Î
½ å
å
½
!
½
å
"
×
MONOPOLY
Ô
!#
$!$$#
!$!!%&
'()*
BEFORE E; MR>MC; OUTPUT WILL
EXPAND SINCE IT WILL IMPROVE PROFIT
AFTER E; MR< MC; OUTPUT WILL
DECLINE IMPROVE PROFIT
MC
ATC
u
u u
á
MR=MC V
D
MR
u
WHY MONOPOLY ? 4 FACTORS
Firm may control the entire supply of raw materials required to
produce the product. Viz. up to World War II the Aluminium
company of America (Alcoa) controlled almost every source of
bauxite.
The firm may own a patent or copyright that precludes other firms
from using a particular production process or producing the same
product. For example, when cellophane was introduced, Du Pont had
monopoly power in its production based on patents. Xexox had
monopoly on copying machine. Patents are granted for 17 years to
incentivise invention.
Examples:
VNumerous Brands of Breakfast cereals, Toothpastes,
Cigarettes, detergents , Cold medicines.
á D
MR>MC
MC> MR
MR=MC
! !
MR
u
× ©
!$!!%%%&!
+
$
'
%
,
-
%
)
CONNAUGHT
PLACE DELHI
# "
)- Large no. of entries and exist
./0.,
every year .
0/1
Many advertise their products,
2
existence, locations, menu, usual
,
claim of superiority (which no one
takes them seriously)
OLIGOPOLY: MEANING & SOURCES
A few firms may own a patent for the exclusive right to produce a
commodity or to use a particular production process.
Established firms may have a loyal following of customers based on the
product quality and service (brands) that new firms would find very
difficult to match.
!$!
!#%
'$'##
$#+
!#%
%$3
$
%#O
!#%
OLIGOPOLY MODELS
á.
á
á.
M
©
Cartel
©
Competition Among Consumers
Ô
u
!
a
u
!
Ô
u
©
Oligopsonies
½ !
½
½
½
½
©
Example
©
888
½
/9
7
:9
7
7
, --$-,
./;9
./<9
=#
>--
$-
? $
©
Duopolies and Cartels
Desoligopolization
½
½ !
game theory
½ A
@
½ A
@
½ - A
-
½
×
áå
½
½
A
½ For example,
A
-
©
½
A