2. MARKET
Some definition of Market according to
Economists are;
• “By a market, economist mean any organization whereby buyers
and sellers of a good are keep in close touch with each other.”
-Stonier and Hague
• “The market, in economics, is simply the network of dealings in
any factor or product between buyers and sellers.”
-Cairn Cross
• “The term market refers not to a place but a commodity or
commodities of buyers and sellers of the same who are in direct
competition with each other.” -Chapman
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3. There are a variety of different market
systems that exist, depending on the
industry and the companies within that
industry. It is important for small
business owners to understand what
type of market system they are operating
in when making pricing and production
decisions, or when determining whether
to enter or leave a particular industry.
Market System
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Types of
Market System
1. PERFECT COMPETITION
2. IMPERFECT COMPETITION
3. MONOPOLY
4. MONOPOLISTIC
5. OLIGOPOLY
6. Characteristic of Perfect Competition
There are five main characteristic:
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Large number of buyer and sellers.
Freedom of entry and exit.
Limited share in the market.
Perfect mobility among factors.
Uniform price
9. Characteristic of Imperfect
Competition
There are four main characteristic:
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Large number of buyer and sellers.
Product differentiation
Expenditure on advertisement and other selling cost
Non-price competition
12. Characteristic of Monopoly
There are four main characteristic:
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Single seller of a product.
No Close Substitution.
Large number of buyers.
No competition
15. Characteristic of Monopolistic
Competition
There are five main characteristic:
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Large number of buyer and sellers.
Freedom of entry and exit.
Product Differentiation.
Lack of Perfect Knowledge
Less Mobility
18. Characteristic of Oligopoly
There are five main characteristic:
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Fewer number of buyer and sellers.
Freedom of entry and exit.
Lack of Uniformity.
Existence of Price Rigidity.
No Unique Pattern of Pricing Behaviour