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    Faizan Showkat
    This document is an economics assignment submitted by Reyhan Mushtaq to Dr. Parvaiz Ahmad Mir at the Islamic University of Science & Technology. It defines the law of demand, which states that when all other factors are held constant, the quantity demanded of a good decreases when the price increases. It provides a diagram showing an downward sloping demand curve. It then discusses market structure, defining it as the characteristics of a market in terms of competition and pricing policies. It outlines the four main types of market structures and the major determinants that define a market's structure.

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    Assignment: Submitted To: Submitted by

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    27 views4 pages
    This document is an economics assignment submitted by Reyhan Mushtaq to Dr. Parvaiz Ahmad Mir at the Islamic University of Science & Technology. It defines the law of demand, which states that when all other factors are held constant, the quantity demanded of a good decreases when the price increases. It provides a diagram showing an downward sloping demand curve. It then discusses market structure, defining it as the characteristics of a market in terms of competition and pricing policies. It outlines the four main types of market structures and the major determinants that define a market's structure.

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    MBA-18-51

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    This document is an economics assignment submitted by Reyhan Mushtaq to Dr. Parvaiz Ahmad Mir at the Islamic University of Science & Technology. It defines the law of demand, which states that when all other factors are held constant, the quantity demanded of a good decreases when the price increases. It provides a diagram showing an downward sloping demand curve. It then discusses market structure, defining it as the characteristics of a market in terms of competition and pricing policies. It outlines the four main types of market structures and the major determinants that define a market's structure.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    27 views4 pages

    Assignment: Submitted To: Submitted by

    Uploaded by

    Faizan Showkat
    This document is an economics assignment submitted by Reyhan Mushtaq to Dr. Parvaiz Ahmad Mir at the Islamic University of Science & Technology. It defines the law of demand, which states that when all other factors are held constant, the quantity demanded of a good decreases when the price increases. It provides a diagram showing an downward sloping demand curve. It then discusses market structure, defining it as the characteristics of a market in terms of competition and pricing policies. It outlines the four main types of market structures and the major determinants that define a market's structure.

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    © All Rights Reserved
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    ASSIGNMENT

    ECONOMICS
    SUBMITTED TO: DR. PARVAIZ AHMAD MIR
    SUBMITTED BY:
    REYHAN MUSHTAQ

    ROLL N0: MBA-18-51

    MBA 3RD SEMESTER

    DEPARTMENT OF MANAGEMENT STUDIES

    ISLAMIC UNIVERSITY OF SCIENCE &


    TECHNOLOGY
    LAW OF DEMAND

    Definition: 
    The law of demand states that other factors being constant, price and quantity
    demand of any good and service are inversely related to each other. When the
    price of a product increases, the demand for the same product will fall.

    Law of demand explains consumer choice behaviour when the price changes.
    In the market, assuming other factors affecting demand being constant, when
    the price of a good rises, it leads to a fall in the demand of that good. This is
    the natural consumer choice behaviour. This happens because a consumer
    hesitates to spend more for the good with the fear of going out of cash.

    The above diagram shows the demand curve which is downward sloping.
    Clearly when the price of the commodity increases from price p3 to p2, then its
    quantity demand comes down from Q3 to Q2 and then to Q3 and vice versa.

    Market Structure
    The Market Structure refers to the characteristics of the market either
    organizational or competitive, that describes the nature of competition and the
    pricing policy followed in the market.
    Thus, the market structure can be defined as, the number of firms producing
    the identical goods and services in the market and whose structure is
    determined on the basis of the competition prevailing in that market.

    The term “market” refers to a place where sellers and buyers meet and
    facilitate the selling and buying of goods and services. But in economics, it is
    much wider than just a place, It is a gamut of all the buyers and sellers, who
    are spread out to perform the marketing activities.

    Types of Market Structure

    1. Perfect Competition Market Structure


    2. Monopolistic Competition Market Structure
    3. Oligopoly Market Structure
    4. Monopoly Market Structure

    The major determinants of the market structure are:

    1. The number of sellers operating in the market.


    2. The number of buyers in the market.
    3. The nature of goods and services offered by the firms.
    4. The concentration ratio of the company, which shows the largest market
    shares held by the companies.
    5. The entry and exit barriers in a particular market.
    6. The economies of scale, i.e. how cost efficient a firm is in producing the
    goods and services at a low cost. Also the sunk cost, the cost that has already
    been spent on the business operations.
    7. The degree of vertical integration, i.e. the combining of different stages
    of production and distribution, managed by a single firm.
    8. The level of product and service differentiation, i.e. how the company’s
    offerings differ from the other company’s offerings.
    9. The customer turnover, i.e. the number of customers willing to change
    their choice with respect to the goods and services at the time of adverse
    market conditions.

    Thus, the structure of the market affects how firm price and supply their goods
    and services, how they handle the exit and entry barriers, and how efficiently a
    firm carry out its business operations

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