Market structure, force, price determination , demand & supply

Puran sahu pgdm second yearMarket structure, force, price determination , demand & supply

What is market ?The meaning of market is a public place ,open space or a building, where people meet to buy and sell goods.

Component of a marketGoods commodity or service.BuyersSellersInteraction between buyer and seller. interaction should be about businessDemarcation of area may be a place, region, country or globalThe existence of price uniformity or competition is not necessary.

CLASSIFICATION OF THE MARKETFreedom of interactionTime spanAreaNaturePublic intervention Accrual of marketing merging

1. Perfact market - a. Perfect competition, a theoretical market structure that features no. Example financial market stock exchange , currency market bonds. b. imperfect market Monopolistic competition, a type of imperfect competition such that many producers sell products or services . Examples restaurants, professions solicitors, etc., building firms plasterers, plumbers, etc.Oligopoly, in which a market is run by a small number of firms that together control the majority of the market share.

5

Duopoly, a special case of an oligopoly with two firmsMonopoly, where there is only one provider of a product or service.

2. On the basis of timeVery short period marketShort period marketLong period marketPermanent market

3. On the basis of areaArea coverage village marketTaluka marketRegional marketNational marketGlobal market

4. The basis of location Village marketPrimary marketWholesale marketTerminal marketSeaboard market

5. People servedUrban marketRural market

DEFINATION OF MARKET STRUCTUREORGENIZATIONAL CHARACTERISTRICTES of a market which influence nature of competition and pricing and affect the conduct of business firms

Components of market structureDegree of integrationConcentration of powerFlow of market informationDegree of product differentiationConditions of entry of firms in the market

Market StructuresType of market structure influences how a firm behaves:PricingSupplyBarriers to EntryEfficiencyCompetition

MARKET FORCES ?The forces which contribute in determining the prices in a market directly or indirectly are called market forces. The forces are classification into two broad categories Tangible forces in tangible forces

PRICE DETERMINATION IN MARKETS

Definition price determination

Interaction of the free market forces of demand and supply to establish the general level of price for a good or service.

How can the price of tacos change?Changes in demand can be caused by Change in consumer incomesChanges in the price of substitutesChanges in the price of complimentsChanges in testes Changes in supply can be caused byChanges in price of outputChanges in technology Changes in taxes

EQUILIBRIUM PRICE DEFINEDThe equilibrium price of a good is:a price at which quantity supplied equals quantity demanded.a price at which excess demand equals zero.At the equilibrium price there is no net tendency for price to change.

Excess demand exists when, at the current price, the quantity demanded is greater than quantity supplied.

Excess supply exists when, at the current price, the quantity supplied is greater than the quantity demanded.

Market price & demandKinked Demand Curve

Price

Quantity

D = elastic

D = Inelastic

5

100

Kinked D Curve

PROJECTION OF DEMAND AND SUPPLY OF FARM PRODUCT

Projection of demandThe projections of demand and supply in agricultural produce is a planning approach. In a vast country like india , arriving at demand and supply projection is not easy .

Supply projectionSupply projection in a short range period for a one or teo year can be done with existing data on hand and knowledge base.seasonal productClimatic conditionsRegional conditions

THANKS