Sigma Institute of Engineering Subject : Economics & Management Topic: Monopoly & Oligopoly Dept: Electronics Communication Name : Shakti Y Naidu Enrollment: Guided by : Ruchi nayak

 INDEX 1. Price determination in different market 2. Marketing Type 3. Monopoly 4. Different type of barrier 5. Demerit of Monopoly 6. View of prof.chamberlin 7. Oligopoly

 Price determination in different market Some of relevant question,which a firm has to decide upon relate to the level of production and resource allocation for it. The various costs concept help the production process. thus cost analysis from an integral part of the decisions taken by firm and therefore the subject matter of economics. it helps to formulate pricing policies.

 Marketing types There are basic four type of marketing structure which are i. Monopoly ii. Oligopoly iii. Monopolastic competition iv. Perfect competion

 Monopoly Monopoly is a market in which there is a single producer or seller supplying the product having no close substitution. He control the entire supply and he can determine the price. It is only firm and so it also constitutes the industry as a whole. so, under monopoly, the distinction between the firm and the industry disappears

 Different type barrier Economic barriers A firm can enjoy the exclusive ownership or control of raw material, which prohibits competition. It is called ``NATURAL MONOPOLY” In some industries, economies of scale are so practically pronounced that competition is simply unworkable. Such industries are called “social monopolies“ and most of them are public utilities like electricity, railways and communication facilities.

 Different type of barrier Artificial barriers There are legal monopolies. law prohibits competition and monopoly firms come into existence. it is note worthy that monopoly can exist only when there are strong barriers to the entry of competitors. in this case the barriers are so great and strong that they block all other producers from entering the field of industry of the monopolist.

 Demerits of monopoly The level of out put ensuring maximum profit is many times less then optimum showing higher average cost as well as excess capacities reslting into wastage of scarce resources. As there is no competition evenig case of monopolices in private sector many times there is no incentive for efficency. The in efficency are reflected in the higher cost of production shifted to the consumers by charging high price.

 View of Prof.Chamberlin According to Prof.chamberlin, selling cost is different than production cost. The production cost is a cost incurred by the producer when the producer accept demand as a given in the market and adjusts his cost and production pattern. Where as the selling cost is cost incurred by the monopolistic competitor to change the demand pattern suitable to create demand for his differentiated product.

 Oligopoly This kind of market is one where there are only very few producers of a product. The basic characteristic of an oligopolistic situation is the fact that there is interdependence. It implies that the policies of one producer affect others significantly. so he cannot ignore the possible reaction to the changes in the pricing as well as output and market policies. In the case of oligopoly without product differentiation, the price, is theoretically is said to be indeterminate

In the case of oligopoly with product differentiation the effect of marketing strategies like aggressive advertising cannot be ignored by other oligopolies so there is uncertainty about the effectiveness of the advertising. Thus there is no price competition but non price competition in the form of improvement in the quality of the product as well as effective advertisement and other marketing strategies.