Good's own price: The basic demand relationship is between potential prices of a good and the quantities that

would be purchased at those prices.[7] Generally the relationship is negative meaning that an increase in price will induce a decrease in the quantity demanded. This negative relationship is embodied in the downward slope of the consumer demand curve. The assumption of a negative relationship is reasonable and intuitive. If the price of a new novel is high, a person might decide to borrow the book from the public library rather than buy it. Price of related goods: The principal related goods are complements and substitutes. A complement is a good that is used with the primary good.[9] Examples include hotdogs and mustard, beer and pretzels, automobiles and gasoline. (Perfect complements behave as a single good.) If the price of the complement goes up the quantity demanded of the other good goes down.[10] Mathematically, the variable representing the price of the complementary good would have a negative coefficient in the demand function. For example, Qd = a - P - Pg where Q is the quantity of automobiles demanded, P is the price of automobiles and Pg is the price of gasoline. The other main category of related goods are substitutes. Substitutes are goods that can be used in place of the primary good. The mathematical relationship between the price of the substitute and the demand for the good in question is positive. If the price of the substitute goes down the demand for the good in question goes down.[11] Income: In most cases, the more income you have the more likely you buy.[12][13] Tastes or preferences: The greater the desire to own a good the more likely you are to buy the good.[14] There is a basic distinction between desire and demand. Desire is a measure of the willingness to buy a good based on its intrinsic qualities. Demand is the willingness and ability to put one's desires into effect. It is assumed that tastes and preferences are relatively constant. Consumer expectations about future prices and income: If a consumer believes that the price of the good will be higher in the future he is more likely to purchase the good now. If the consumer expects that her income will be higher in the future the consumer may buy the good now. In other words positive expectations about future income may encourage present consumption.[15]

Types of Markets :

Consumer Markets Consumer markets are the markets for products and services bought by individuals for their own or family use. Markets originally started as marketplaces usually in the center of villages and towns, for the sale or barter of farm product, clothing and tools. These kinds of street markets developed into a whole variety of consumer-oriented markets, such as specialist markets, shopping centers, supermarkets, or even virtual markets such as eBay. Commodity markets Commodity markets are markets where raw or primary products are exchanged. With the rising price of oil and food, commodity markets are once again under the spotlight. Commodity markets include: energy (oil, gas, coal and increasingly renewable energy sources such as biodiesel), soft commodities and grains (wheat, oat, corn, rice, soya beans, coffee, cocoa, sugar, cotton, frozen orange juice, etc), meat, and financial commodities such as bonds. Capital market & Industrial Markets A capital market is a market for securities (debt or equity), where business enterprises (companies) and governments can raise long-term funds. Industrial markets involve the sale of goods between businesses. These are goods that are not aimed directly at consumers. Capital goods markets help businesses to buy durable goods to be used in industrial and manufacturing processes. A number of services can also be associated with these goods. Transactions tend to be wholesale with large quantities of goods being transacted at low prices.

Features of monopoly

Single seller: In a monopoly there is one seller of the good who produces all the output. Therefore, the whole market is being served by a single firm, and for practical purposes, the firm is the same as the industry.

Market power: Market power is the ability to affect the terms and conditions of exchange so that the price of the product is set by the firm (price is not imposed by the market as in perfect competition). Although a monopoly's market power is high it is still limited by the demand side of the market. A monopoly faces a negatively sloped demand curve not a perfectly inelastic curve. Consequently, any price increase will result in the loss of some customers. Firm and industry: In a monopoly, market, a firm is itself an industry. Therefore, there is no distinction between a firm and an industry in such a market. Price Discrimination: A monopolist can change the price and quality of the product. He sells more quantities charging less price against the product in a highly elastic market and sells less quantities charging high price in a less elastic market.

Characteristics of oligopoly Profit maximization conditions: An oligopoly maximizes profits by producing where marginal revenue equals marginal costs.[1] Ability to set price: Oligopolies are price setters rather than price takers.[1] Entry and exit: Barriers to entry are high.[2] The most important barriers are economies of scale, patents, access to expensive and complex technology Number of firms: "Few" a "handful" of sellers.[2] There are so few firms that the actions of one firm can influence the actions of the other firms.[4] Long run profits: Oligopolies can retain long run abnormal profits. High barriers of entry prevent sideline firms from entering market to capture excess profits. Product differentiation: Product may be homogeneous (steel) or differentiated (automobiles).[3] Perfect knowledge: Assumptions about perfect knowledge vary but the knowledge of various economic actors can be generally described as selective. Oligopolies have perfect knowledge of their own cost and demand functions but their inter-firm information may be incomplete. Buyers have only imperfect knowledge as to price,[2] cost and product quality. Interdependence: The distinctive feature of an oligopoly is interdependence.[5] Oligopolies are typically composed of a few large firms. Each firm is so large that its actions affect market conditions. Therefore the competing firms will be aware of a firm's market actions and will respond appropriately