Forms of Market
Market is a mechanism or arrangement through which the buyers and sellers of a commodity or service come into contact with one another and complete the act of sale and purchase of the commodity or service on mutually agreed prices. 1. Perfect competition - It is a market structure where there are large number of buyers and sellers selling identical products at uniform price with free entry and exit of firms and absence of govt. control. Under perfect competition, price remains constant therefore, average and marginal revenue curves coincide each other i.e., they become equal and parallel to x-axis. Under perfect competition price is determined by the industry on the basis of market forces of demand and supply. No individual firm can influence the price of the product. A firm can takes the decision regarding the output only. So industry is price maker and firm is price taker. Feature of perfect competition : a. Very large no. of buyers and sellers....