SOCIAL WELFARE IS MAXIMUM IN CASE OF IMPERFECT MARKET CONDITION

Prateek Jindal(Roll No_09) Sagar Talele(Roll No_12) Soumillya Chandra(Roll No_15) Suneet Mehta(Roll No_16) Bhuvan Verma(Roll No_19)

Social welfare refers to the overall welfare of society. With sufficiently strong assumptions, it can be specified as the summation of the welfare of all the individuals in the society. Welfare may be measured either cardinally in terms of "utils" or dollars, or measured ordinally

A type of market that does not operate under the rigid rules of perfect competition. Perfect competition implies an industry or market in which no one supplier can influence prices, barriers to entry and exit are small, all suppliers offer the same goods, there are a large number of suppliers and buyers, and information on pricing and process is readily available. There are three kinds of imperfect market forms: Monopoly Monopolistic Oligopoly

In economics, a monopoly is defined as a persistent market situation where there is only one provider of a product or service Monopolies are characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods In a monopoly a single firm is the sole provider of a product or service; in a cartel a centralized institution is set up to partially coordinate the actions of several independent providers (which is a form of oligopoly)

Market Structure
Characteristics Number of firms Barriers to entry Monopoly One High Monopolistic Competition Many Low Some Oligopoly Few High Substantial

Market power Substantial (control over price) Type of product unique

Differentiated Standardized or differentiated

Single Sellers A pure monopoly is an industry in which a single firm is the sole producer of a good or the sole provider of a service. This is usually caused by barriers to entry No Close Substitutes The product or service is unique in ways which go beyond brand identity, and cannot be easily replaced (a monopoly on water from a certain spring, sold under a certain brand name, is not a true monopoly; neither is Coca-Cola, even though it is differentiated from its competition in flavor)

Price Maker In a pure monopoly a single firm controls the total supply of the whole industry and is able to exert a significant degree of control over the price, by changing the quantity supplied (an example of this would be the situation of Viagra before competing drugs emerged). In subtotal monopolies (for example diamonds or petroleum at present) a single organization controls enough of the supply that even if it limits the quantity, or raises prices, the other suppliers will be unable to make up the difference and take significant amounts of market share Blocked Entry The reason a pure monopolist has no competitors is that certain barriers keep would-be competitors from entering the market. Depending upon the form of the monopoly these barriers can be economic, technological, legal (e.g. copyrights, patents), violent (competing businesses are shut down by force), or of some other type of barrier that completely prevents other firms from entering the market

So how is Google so successful? The answer is easy:

Simplicity

Google simplified the search to a single logo, search box, and two buttons.. Googles back-end technology is the best. Simply put, Google revolutionized the Internet for ever by allowing the average person like you and I to instantly find out what they are looking forand that is just 1/1000000000th of what Google does. Images, Maps, Videos, Documents, Calendar, News, Shopping, Gmail, Books, Finance, Translate, need I say more

A large reason for Googles rise to success has been freedom: the freedom that Google provides to its users over other platforms. To prevent Google from dominating us unfairly in the internet marketplace, the key will be to hold them to this expectation of freedom. As we put more of our trust in the hands of Google, in exchange for our trust we must analyze Google more and more closely to ensure that our relationship with them is still in our best interest The moment our freedom to enjoy choice of internet service provision appears to be under attack, it is up to us to call foul. services

Thank you God for giving us Google, what a blessing!

Monopolistic competition is a form of imperfect competition where many competing producers sell products that are differentiated from one another In Monopolistic competition, a firm takes the prices charged by its rivals as given and ignores the impact of its own prices on the prices of other firms.

Monopoly and Competition Large number of relatively small competitors Modest degree of market control on the supply side Easy entry and exit from industry examples of monopolistic competition include restaurant, retail stores, barber and beauty shops, service stations and service industries in large cities.

Market Structure
Characteristics Number of firms Barriers to entry Monopoly One High Monopolistic Competition Many Low Some Oligopoly Few High Substantial

Market power Substantial (control over price) Type of product unique

Differentiated Standardized or differentiated

Usually thousands of restaurant in any large city Catering to all types of foods, tastes, incomes and sectors

Many close substitutes

Entry into restaurant business is relatively easy Each restaurant has differentiating factors

Small market shares No collusion Product attribute Innovative and Best possible product Buyers have perfect information In the long run, the market becomes more like a perfectly competitive one

An oligopoly is a market dominated by a few producers, each of which has control over the market. It is an industry where there is a high level of market concentration Concentration ratio>60% of total market sales/ Demand

Market Structure
Characteristics Number of firms Barriers to entry Monopoly One High Monopolistic Competition Many Low Some Oligopoly Few High Substantial

Market power Substantial (control over price) Type of product unique

Differentiated Standardized or differentiated

Differentiated Oligopoly-Each firm in the market is selling a branded (differentiated) product. ExAutomobiles, soaps etc) Pure Oligopoly-If the product is Homogenous Ex Steel and Aluminium Industry

Significant entry barriers into the market prevent the dilution of competition in the long run. It is perfectly possible for many smaller firms to operate on the periphery of an oligopolistic market, but none of them is large enough to have any significant effect on market prices and output Due to large economy of scale

Interdependence means that firms must take into account likely reactions of their rivals to any change in price, output or forms of nonprice competition.

Non-price competition is a consistent feature of the competitive strategies of oligopolistic firms.

Free deliveries and installation Extended warranties for consumers and credit facilities Longer opening hours (e.g. supermarkets and petrol stations) Branding of products and heavy spending on advertising and marketing Extensive after-sales service Expanding into new markets + diversification of the product range

Better quality of service including guaranteed delivery times for consumers and low-cost servicing agreements Longer opening hours for retailers, 24 hour telephone and online customer support Extended warranties on new products Discounts on product upgrades when they become available in the market