The term market is a place where buyers and sellers bargain over a commodity for price. There are many factors which determine the extent of a market like nature of the commodity, size of population, extent of demand and so on.
Markets can be classified on the basis of area, volume of business, time, status of sellers, regulation and competition.
On the basis of competition, a market is classified in to Perfect competition, monopoly, imperfect competition and oligopoly.
The firms can operate with a complex set of objectives and under various constraints. However, we assume that firms act as if they are maximizing profits. With this assumption, we study the behaviour of firms in different markets.
MR, AR and Price elasticity of demand are uniquely related to one another. MR =AR X e - 1/e
Revenue is also known as selling price.
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