1. 1 Teaching Innovation - Entrepreneurial - Global The Centre for Technology enabled Teaching & Learning, N Y S S, India DTEL DTEL (Department for Technology Enhanced Learning)

2. DEPARTMENT OF MECHANICAL ENGINEERING V-SEMESTER INDUSTRIAL ECONOMICS AND ENTREPRENEURSHIP DEVELOPMENT 2 UNIT NO.3

3. UNIT 3:- SYLLABUSDTEL. Inflation, effect of inflation, 1 Monetary and fiscal measures to control inflation, 2 deflation, stagflation direct and indirect taxes. 3 Market and market structures, 4 3 Perfect competition, Monopoly, 5 Monopolistic competition, Oligopoly, 6 Price determination in these Situations 7

4. UNIT 3:- SYLLABUSDTEL. Concept & overview of share market, 8 Effect of share market on economy, 9 Share market terminologies. 10 4

5. UNIT-3 SPECIFIC OBJECTIVE / COURSE OUTCOMEDTEL To understand the relationship between the business market and society. 1 5 The student will be able to:

6. LECTURE 17:- MARKETDTEL Inflation, Deflation 6 6 Aggregate demand and aggregate supply considers the entire quantity of goods and services in an economy. The equilibrium price in aggregate supply and demand curves is called the price level. Inflation - An increase in the price level Deflation – A decrease in price level

7. LECTURE 17:- MARKETDTEL Effect Of Inflation 7 7 Hurts people on fixed incomes (the retired) hurts savers Hurts lenders (helps debtors) Hurts people who contract to be paid in the future Makes financial decision making more difficult

8. LECTURE 18:- MARKETDTEL Monetary & Fiscal 8 8 Measures to control inflation Fiscal measures- Measures taken by the government to control inflation. A: Decrease in public expenditure. B-Delay in payment of old debts. C-Increase in taxes. D-Over valuation of money.

9. LECTURE 18:- MARKETDTEL Monetary & Fiscal 9 9 Measures to control inflation Monetary measures- Classical economists are of the view that inflation can be checked by controlling the supply of money. Some of the important monetary measures to check the inflation are as under: Control over money Credit control

10. LECTURE 19:- MARKETDTEL Stagflation 10 Stagflation- A portmanteau of stagnation and inflation, is a term used in economics to describe a situation where the inflation rate is high, the economic growth rate slows down, and unemployment remains steadily high. It raises a dilemma for economic policy since actions designed to lower inflation may exacerbate unemployment, and vice versa.

11. LECTURE 19:- MARKETDTEL Direct And Indirect Taxes. 11 Direct Taxes: A Direct tax is a kind of charge, which is imposed directly on the taxpayer and paid directly to the government by the persons (juristic or natural) on whom it is imposed. A direct tax is one that cannot be shifted by the taxpayer to someone else. The some important direct taxes imposed in India are as under: Income Tax Corporation Tax Property Tax Inheritance (Estate) Tax Gift Tax

12. LECTURE 19:- MARKETDTEL Direct And Indirect Taxes. 12 Indirect Tax: An indirect tax is a tax collected by an intermediary (such as a retail store) from the person who bears the ultimate economic burden of the tax (such as the customer). An indirect tax is one that can be shifted by the taxpayer to someone else. An indirect tax may increase the price of a good so that consumers are actually paying the tax by paying more for the products.

13. LECTURE 19:- MARKETDTEL Direct And Indirect Taxes. 13 The some important indirect taxes imposed in India are as under. Customs Duty Central Excise Duty Service Tax Sales Tax Value Added Tax (VAT) Securities Transaction Tax (STT)

14. LECTURE 20:- MARKETDTEL Meaning Of Market 14 In general, the word ‘market’ refers to a place or an area where buyers and sellers generally meet so as to buy and sell a particular commodity. Economics Term, It refers to a particular commodity that is sold and purchased rather than a place or an area.

15. LECTURE 20:- MARKETDTEL Market Structure 15 Perfect competitionMonopolyMonopolistic competitionOligopoly

16. LECTURE 21:- MARKETDTEL Meaning Of Prefect Competition 16 A market is said to be perfect when there is a large number of buyers and sellers of the product and there is a complete absence of rivalry among the firms. The firms sell products which are homogeneous.

17. LECTURE 21:- MARKETDTEL Features of Perfect Competition 17 Large number of buyers and sellers.Homogeneous productsFree entry and exit of the firmsNo government regulationUniform price

18. LECTURE 21:- MARKETDTEL Assumption Of Perfect Competition 18 Perfect knowledge of market conditions.Perfect mobility of the factorsAbsence of selling and transportation costs

19. LECTURE 22:- MARKETDTEL Meaning Of Monopoly 19 Monopoly is a market situation in which there is a single seller, there are no close substitutes for commodity it produces, there are barriers to entry.

20. LECTURE 22:- MARKETDTEL Features Of Monopoly 20 Exclusive Ownership Patent Rights Barriers Price Policy

21. LECTURE 22:- MARKETDTEL Assumptions Of Monopoly 21 One seller and large number of buyers.Monopoly is also an IndustryRestrictions on the entry of the new firmsNo Close SubstitutesPrice MakerPrice DiscriminationAverage Revenue and Marginal Revenue

22. LECTURE 22:- MARKETDTEL Price And Output Determination Under Monopoly 22 Perfect Competition 4 3 2

23. LECTURE 22:- MARKETDTEL Monopolistic competition 23 Monopolistic competition is market structure where there is a large number of small sellers, selling differentiated but close substitute products.

24. LECTURE 22:- MARKETDTEL Assumptions or Features of Monopolistic Competition 24 Large Number of Buyers and Sellers.Product DifferentiationFree Entry and ExitIndividual Pricing by a FirmPrice ControlNon-Price Competition Average Revenue and Marginal Revenue

25. LECTURE 22:- MARKETDTEL Price And Output Determination Under Monopolistic 25 Price Quantity 0 (a) Firm makes profit Profit MC ATC Profit- maximizing quantity ATC (b) Firm makes losses MR Demand Price Quantity 0 Losses MC ATC Loss- minimizing quantity ATC MR Demand Price Monopolistic competitors, like monopolists, maximize profit by producing the quantity at which marginal revenue equals marginal cost. The firm in panel (a) makes a profit because, at this quantity, price is above average total cost. The firm in panel (b) makes losses because, at this quantity, price is less than average total cost.

26. LECTURE 22:- MARKETDTEL Oligopoly Market 26 An oligopoly is a market in which there are few producers of a product & Many Buyers.

27. LECTURE 22:- MARKETDTEL Monopolistic competition: between perfect competition& monopoly 27 Market structure Perfect competition Monopolistic competitionMonopoly Features that all three market structures share Goal of firms Rule for maximizing Can earn economic profits in the short run? Features that monopolistic competition shares with monopoly Price taker? Price Produces welfare-maximizing level of output? Features that monopolistic competition shares with competition Number of firms Entry in long run? Can earn economic profits in long run? Maximize profits MR = MC Yes P = MC Yes Many Yes No Maximize profits MR = MC Yes No P > MC No Many Yes No Maximize profits MR = MC Yes No P > MC No One No Yes

28. LECTURE 23:- MARKETDTEL Concept & Overview Of Share Market 28 Definition: What is a Stock? An instrument- that signifies an ownership position (called equity) in a corporation, and represents a claim on its proportional share in the corporation’s assets and profits. For example, if a company has 1000 shares of stock outstanding and a person owns 50 of them, then he/she owns 5% of the company. Most stock also provides voting rights, which give shareholders a proportional vote in certain corporate decisions

29. LECTURE 23:- MARKETDTEL Concept & Overview Of Share Market 29 What is Stock / share market? A stock market is a place where the stocks and securities of various companies are traded. “Stock exchange” - means anybody of individuals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities. Two major stock / share markets BSE (Bombay Stock Exchange ) NSE (National Stock Exchange)

30. LECTURE 23:- MARKETDTEL Concept & Overview Of Share Market 30 BOMBAY STOCK EXCHANGE (BSE) Is the oldest Stock Exchange in Asia with a rich heritage. BSE was established in 1875 as “The Native Share & Stock Brokers”. First Stock Exchange in the country to obtain permanent recognition in 1956 from GOI. Around 4700 Indian companies listed with Stock Exchange. As of 2005, it is among the five biggest Stock Exchanges in the world in terms of transactions volume.

31. LECTURE 23:- MARKETDTEL Concept & Overview Of Share Market 31 National Stock Exchange (NSE) In the year 1991 Pherwani Committee recommended to establish National Stock Exchange (NSE) in India. In National Stock Exchange there is trading of equity shares, bonds and government securities. The NSE India ranked 3rd position since last 4 years in terms of total number of trading per calendar year. Presently there are 24 stock exchanges in India, out of which 20 have exchanges The NSE operates in: Wholesale Debt market Capital Market.

32. LECTURE :- MARKETDTEL 32 THANK YOU