Introduction
Good morning learners , today we are starting a new topic that is called Dynamics of markets. Let's watch this 3 minutes video so that you be to understand the important concept of this topic.
Task
Due date: 28 August 2021
Task: 7
Marks: 28
Answer these questions after watching the videos that will follow.
Question 1
1.1 Which one is a characteristic of o a Perfect market?
a. Kinked demand curve
b. Price takers
c. Eskom
d. Little control over price
[2]
Question 2
2.1 Distinguish between Natural monopoly and Artificial monopoly. [6]
Question 3
Tabulate the differences between the Perfect market ,Monopolie ,Oligopoly & Monopolistic competition and give an examples.
[20]
Process
Term 2
Topic 7: Dynamics of Markets
Watch the following videos learners so that you will be able to have a cleared understanding of the dynamics of. After the videos there are not explaining everything is said in the videos.
Perfect market
It is a market structure with a large amount of participants who are PRICE TAKERS.
- Entry and exit is free.
- All information to buyers and sellers is available.
- Homogenous products are sold.
- No intervention by government.
- Factors of products are mobile.
- No collusion.
Examples are Shares markets, Foreign exchange markets, Wool markets or other agricultural products.
Imperfect markets
Monopolies
- There is a single seller in a market with no close substitutes.
- Producers have no free entry to the market.
- They have all the information of the market , because they are the only seller in the market.
- The monopolist is also called the PRICE MAKER.
- They decide on the production level.
Example Eskom.
Oligopolies
- The market is controlled by a FEW SELLERS which means that each seller will take the other in account.
- Each one of the sellers supplies differentiated products.
- New business can enter the market freely, but normally it is not easy because there are only few business in the market.
- Have considerable control over the prices but not as much as monopolies
- They have a kinked demand curve.
Examples: cellphone companies, take away businesses, vehicle enterprises , cement businesses.
Monopolistic competition
- There are many enterprises that produces goods that are similar, but NOT identical.
- There are no OBSTACLES that limits entry an exit to the market.
- Businesses have little control over prices of the product.
- Monopolistic competition is a combination of a perfect market as well a monopoly.
- The information to buyers and sellers is incomplete.
- Monopolistic competition normally occurs generally in the retailer and service sector.
Examples: Clothes Shops, Take-away businesses, furniture shops, tooth paste.
Evaluation
| QUESTIONS | Marks |
|
Question 1 Write only the letter |
2 |
|
Question 2 Differentiatebetween the two. Give full sentences with One example in each.
|
6 |
|
Question 3 Tabulate and differentiate the conditions of these markets. Give examples in each. |
20 |
| TOTAL MARKS | 28 |
Conclusion
I hope you learners understood the different conditions of perfect and imperfect markets.
Watch this video in preparation of our next class.
Credits
Resources.
Teacher Page
This is one of the platform that enhances the teaching and learning. It equips learners skill in technology use.
For enquiries. Please email