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Not a place but a medium of interaction between buyers and sellers of products.

can be both tangible and intangible.

It is important because it enables those with excess goods to sell them to those who need them at a price that gives everyone the best dea

KINDS OF MARKET

the most visible market to us consumers as we also partakes in its activities.

enable raw material and intermediate product producers to sell their products to final product producers who are now the market buyers

enables resource owners to sell the basic services of labor, land and capital to producers of goods and services.

rivalry among various buyers and sellers in the market

a situation of the diffused, impersonal competition among sellers, who compete to sell their goods, and among buyers, who use their purchasing power to acquire the available goods in the market.

THERE ARE VARYING DEGREES OF COMPETITION IN THE MARKET THAT DEPEND ON THE FOLLOWING FACTORS:

TYPES OF COMPETITION

TYPES OF PERFECT COMPETITION

TYPES OF IMPERFECT COMPETITION

many buyers and sellers who are too small to individually affect the price.

products are perfectly similar or standardized such that every consumer has no preference for one seller over the another.

products and resources are perfectly mobile in geographic space, as well as convertible to other uses.

perfect knowledge of economic agents of market such as present and future prices, cost and economic opportunities.

market price and quantity of output are freely determined by supply and demand

exists when a single firm that sells in that market has no close substitutes.

The existence of a monopoly depends on how easy it is for consumers to substitute the products for those of other sellers.

A single seller has control of the entire supply of raw materials

Ownership of patent or copyright is invested in a single seller.

The producer enjoys economies of scale

The grant of a government franchise to a single firm.

a market structure in which many firms can freely enter and exit the market but sell products that are differentiated.

This market is a monopoly of a sort because seller has some control over the price and volume for the exclusive buyers of a preferably different products

a market dominated by a small number of strategically interacting firms.

Few sellers account for most of or total production because barriers to free entry make it difficult for new firms to enter

The action of each firm affects other firms.

There is strong interdependence among firms.

It determines the amount of market power or control the business owner will enjoy

Greater market power means greater ability to control prices and differentiate the products one offers for sale, thus leading to opportunities for more profits

the willingness of a consumer to buy a commodity at a given price.

It is the quantity of a good that a person will buy at a given time, given price of that good.

The desire of a consumer to buy goods and services and his/her willingness to pay a certain price for a good or service.

______ shows the various quantities the consumers are willing to buy at various prices.

As price increases, the quantity demanded for that product decreases.

THE LAW OF DEMAND

Thus, when the price increases, the quantity demanded for the good decreases

refers to the quantity of goods that a seller is willing to offer for sale.

It is the amount of a specific good or service that is made available to the consumers at a specific price.

As the price increases, the quantity of that product increases.

The high price of the good motivates the seller to offer more quantity for sale to increase income.

However, the low price hardly motivates the seller to offer even the same quantity because the lower income from the lower price may no longer be worth the risk.

Monopoly exists for the following reasons:

Characteristics of Oligopoly