Monopolistic Competition Market: Characteristics and Equilibrium
Explores the monopolistic competition market structure, characteristics of limited sellers, differentiated products, entry/exit of firms, demand curve analysis, and equilibrium of firms in terms of price and output determination. Understand the concept of imperfect knowledge, non-price competition, and excess production capacity. Dive into the conditions and equilibrium of firms in monopolistic competition markets.
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
You are allowed to download the files provided on this website for personal or commercial use, subject to the condition that they are used lawfully. All files are the property of their respective owners.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.
E N D
Presentation Transcript
JANATA SHIKSHAN SANSTHAS KISAN VEER MAHAVIDYALAYA, WAI Monopolistic Competition Market Presented By Dr. Waikar M.S. Assistant Professor, Department of Economics
Monopolistic Competition Market Sub content in the unit 3.1 : Meaning and Characteristics 3.2 : Price output under monopolistic Competition Market in Short Run and Long Run / Short Run and Long Run Equilibrium of Firm
Introduction We are studied in previous two chapters the perfect competition market and monopoly market. But in reality we found these cases very rarely. Before 1926 the price determination theories is depend on perfect competition market and monopoly market. In 1926 Prof .Shrafa analyze the combination of perfect competition market and monopoly market. In 1933 Prof. Chamberlin propounded the monopolistic competition market structure in the book of theory of monopolistic competition. In 1933 Mrs. Joan Robinson propounded the concept of imperfect market.
Definition of Monopolistic Competition Market In which market there are coexistence of perfect competition market and monopoly market is called monopolistic competition market. Monopolistic competition is a condition of market in which there are exist many sellers of differentiated but close substitute products having no control over price.
Characteristics of Monopolistic Competition Market Limited sellers Number of buyers Product differentiated Close substitute goods Free entry and exit of firm in market Selling cost Negative sloping demand curve More elastic demand curve Independent price policy
Characteristics of Monopolistic Competition Market Concept of group Imperfect knowledge to buyers of market Real competition Non price competition Transportation cost Goodwill Excess capacity of production Normal profit in long run
Equilibrium of Firm/ Price and output Determination in monopolistic competition Market Conditions of price and output determination/Equilibrium of Firm 1) Marginal cost = Marginal Revenue. 2)Marginal cost curve must cut Marginal revenue curve from below.
Price and output determination of firm in short run/Equilibrium of Firm In short run firm can get Excess profit Loss Normal profit
SHORT RUN PRICE AND OUTPUT DETERMINATION OF FIRM 1 )A Firm Get a Excess Profit Y SMC Price,Revenue,cost SAC A PM Profit B CM E AR MR O QM X Output Quantity
2)A Firm Can get Normal Profit Y SMC SATC Price,Revenue,cost B PM E D/AR MR 0 QM X Output Quantity
A Firm Get a Loss Y SMC Price,Revenue,cost SAC B CM Loss A PM E D/AR MR 0 QM X Output Quantity
Price And Output Determination Of Firm In Long Run A Firm Can get Only Normal Profit in Long Run Y LMC Price,Revenue,cost LAC B PM E D/AR MR QM 0 X Output Quantity
