Page 1 - Lession Note - Main Mkt Forms -74

Class-XI

Microeconomics

CHAPTER-10

Topic –MAIN MARKET FORMS (Module-74)

Sub topic : Basic concepts , Features of perfect competition

Short note

Market refers to a region where the buyers and sellers of a commodity come in
contact with each other to effect the transactions of purchase and sale of the
commodity.

Market structure refers to number of firms and types of firms operating in the
industry.
Three basis on which different market are defined:
(a) Nature of commodity: (i) homogeneous goods (ii) heterogeneous or
differentiated goods.
(b) Number of buyer and sellers: If there are large number of buyers and
sellers, then buyers and sellers are not in a position to influence the price of the
commodity. If, there is a single seller of a commodity, then the seller has control
over a price.
(c) Entry and exit of a firm: (i) free entry and exit of a firm (ii)Restricted entry
and exit of firms
4. Main forms of market are:
(a) Perfect competition
(b) Imperfect competition.
(i) Monopoly
(ii) Monopolistic competition (iii) Oligopoly.
5. Perfect Competition refers to a market situation in which buyers and sellers
operate freely and a commodity sells at a uniform Constant) price.
6. Features and implication of Perfect Competition:

(a) Large number of sellers and buyers: Implication :-
(b) Homogeneous Products :Implication :-
(c) Free entry and exit of firms: Implication :-
(d) Perfect Knowledge about the market: Implication :-
(e) Perfect mobility: Implication :-