AP Inter 1st Year Economics Notes Chapter 5 Theory of Value

Students can go through AP Inter 1st Year Economics Notes 5th Lesson Theory of Value will help students in revising the entire concepts quickly.

AP Inter 1st Year Economics Notes 5th Lesson Theory of Value

→ Market is a place where buying and selling transactions are take place.

→ Markets can be classified into three types.

  1. Time basis
  2. Area basis
  3. Competition basis.

→ A market is said to be perfect when the competition exists when buyers and sellers. are having perfect knowledge about the market conditions. They are large in number. There will be universal price.

→ In this competition price is determined where demand and supply both are equal at point price and output are determined.

AP Inter 1st Year Economics Notes Chapter 5 Theory of Value

→ An imperfect market can take several firms – monopoly. duopoly, oligopoly, monopolistic competition.

→ Monopoly is a single seller market.

→ Monopolistic competition is a midway of perfect competition and monopoly.

→ Few sellers market is oligopoly.

→ Two sellers market is duopoly.

→ Market is a place where buyers and sellers meet and where exchange of goods (buying and selling) takes place.

→ According to Benham, market means “any area over which buyers and sellers are in such close touch with one another either directly or through dealers, that the prices obtainable in one part of the market affect the price paid in other parts.”

→ Basing on area, markets are divided into
a) Local markets
b) National markets and
c) International or Global markets.

→ Basing on time, markets are divided into
a) Very short period/market period markets
b) Short period markets
c) Long period markets.

→ Basing competition, markets are divided into a) Perfect markets b) Imperfect markets.

→ Existence of large number of sellers and buyers, homogeneous product, freedom of entry and freedom of exit,
perfect knowledge of market conditions, perfect mobility of goods and factors of production, absence of transport costs and publicity costs, existence of uniform or single’ price are some of the important features of perfect competition.

→ In perfect competition, the market price is determined by the industry by taking into consideration the total industry / market demand and total market / industry supply.

→ The price at which both demand and supply are equal to each other is known as equilibrium price.

→ The conditions for a firm to reach its equilibrium in perfect competition are 1) Marginal cost should be equal to marginal revenue. 2) Marginal cost curve should intersect / cut marginal revenue from below.

→ The two important conditions for the equilibrium of industry in perfect competition are 1) All the firms in industry must, first reach their individual equilibriums equating their marginal cost with their marginal revenue (MC = MR) 2) At the point where individual firms reach their individual equilibrium, they must earn only normal profit. In other words, the number of firms in the market/industry should be constant or should not change.

→ Monopoly is a market situation in which there is a single seller / firm in the market producing and selling the goods without close substitutes and without competition.

→ Price discrimination is an important policy / practice in monopoly in which the monopolists sell the same good at different prices, to different customers at the same time and in the same market.

→ Price discrimination is of 3 types, namely, a) Personal price discimination b) Local discrimination c) Use discrimination.

AP Inter 1st Year Economics Notes Chapter 5 Theory of Value

→ A market situation in which large number of firms / sellers selling slightly differentiated products/goods is known as monopolistic competition.

→ Large number of sellers and buyers, product differentiation, freedom of entry and exit, greater importance to advertising and selling costs, imperfect knowledge of market conditions, downward sloping demand curve are some of the important features of monopolistic competition.

→ A market where there are few sellers (3 or 4 sellers), selling either homogeneous or differentiated goods is known as oligopoly.

→ A market with two sellers, selling either homogeneous or heterogeneous goods is called duopoly.

→ వస్తు సేవల కొనుగోళ్ళు, అమ్మకాలు జరిగే ప్రదేశాన్ని మార్కెట్ అంటారు.

→ మార్కెట్ను విస్తీర్ణం, కాలవ్యవధి, పోటీని బట్టి వివిధ రకాలుగా వర్గీకరించవచ్చును.

→ విస్తీర్ణం ఆధారంగా మార్కెట్ను స్థానిక మార్కెట్, జాతీయ మార్కెట్, అంతర్జాతీయ మార్కెట్ అని మూడు రకాలుగా విభజిస్తారు.

→ కాల వ్యవధి ఆధారంగా మార్కెట్ను అతిస్వల్పకాలిక మార్కెట్, స్వల్పకాలిక మార్కెట్, దీర్ఘకాలిక మార్కెట్గా విభజిస్తారు.

→ పోటీ ఆధారంగా పరిపూర్ణ పోటీ మార్కెట్, అపరిపూర్ణ పోటీ మార్కెట్ అని రెండు రకాలుగా మార్కెట్ను విభజిస్తారు.

→ అనేకమంది అమ్మకందార్లు, కొనుగోలుదార్లు ఉండటం, సజాతీయమైన వస్తువు ఉత్పత్తి సంస్థల స్వేచ్ఛా ప్రవేశం, నిష్క్రమణ, ఉత్పత్తి కారకాల గమనశీలత రవాణా ఖర్చులు లేకుండుట, మార్కెట్లో ఒకే ధర ఉండటం అనేవి పరిపూర్ణ పోటీ లక్షణాలు.

AP Inter 1st Year Economics Notes Chapter 5 Theory of Value

→ కొనుగోలుదార్ల మధ్యకాని, అమ్మకందార్ల మధ్యకాని సంపూర్ణ పోటీ లేనటువంటి దానిని అసంపూర్ణ పోటీ అంటారు. దీనిలో ధర విచక్షణ ఉంటుంది.

ఈ అపరిపూర్ణ పోటీ మార్కెట్ ముఖ్యంగా నాలుగు రకాలు :

  • ఏకస్వామ్యం
  • ద్విస్వామ్యం
  • పరిమితస్వామ్యం
  • ఏకస్వామ్య పోటీ మార్కెట్

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