1. Home
  2. /
  3. CBSE
  4. /
  5. Class 12
  6. /
  7. Forms of Market and...

Forms of Market and Price Determination class 12 Notes Economics

myCBSEguide App

myCBSEguide App

Download the app to get CBSE Sample Papers 2023-24, NCERT Solutions (Revised), Most Important Questions, Previous Year Question Bank, Mock Tests, and Detailed Notes.

Install Now

CBSE class 12 Forms of Market and Price Determination class 12 Notes Economics in PDF are available for free download in myCBSEguide mobile app. The best app for CBSE students now provides accounting for partnership firm’s fundamentals class 12 Notes latest chapter wise notes for quick preparation of CBSE board exams and school based annual examinations. Class 12 Economics notes on chapter 4 accounting for partnership firm’s fundamentals are also available for download in CBSE Guide website.

CBSE Guide Forms of Market and Price Determination class 12 Notes Economics

CBSE guide notes are the comprehensive notes which covers the latest syllabus of CBSE and NCERT. It includes all the topics given in NCERT class 12 Economics text book. Users can download CBSE guide quick revision notes from myCBSEguide mobile app and my CBSE guide website.

12 Economics notes Chapter 4 Forms of Market and Price Determination

Download CBSE class 12th revision notes for chapter 4 Forms of Market and Price Determination in PDF format for free. Download revision notes for Forms of Market and Price Determination class 12 Notes and score high in exams. These are the Forms of Market and Price Determination class 12 Notes prepared by team of expert teachers. The revision notes help you revise the whole chapter 4 in minutes. Revision notes in exam days is one of the best tips recommended by teachers during exam days.

Download Revision Notes as PDF 

CBSE Class–12 economics
Revision Notes
Micro Economics 04
Forms of Market and Price Determination class 12 Notes Economics

Market is a machanism or arrangement through which the buyers and sellers of a commodity or service come into contact with one another and complete the act of sale and purchase of the commodity or service on mutually agreed prices.

Perfect competition- It is a market structure where there are large number of buyers and sellers selling identical products at uniform price with free entry and exit of firms and absence of govt. control.

Under perfect competition, price remains constant therefore, average and marginal revenue curves coincide each other i.e., they become equal and parallel to x-axis.

Under perfect competition price is determined by the industry on the basis of market forces of demand and supply. No individual firm can influence the price of the product. A firm can takes the decision regarding the output only. So industry is price maker and firm is price taker.

Feature of perfect competition :

(a) Very large no. of buyers and sellers.

(b) Homogeneous product.

(c) Free entry and exit of firms in the market.

(d) Perfect knowledge.

(e) Perfect Mobility.

(f) Perfectly elastic demand curve.

(g) No transportation cost.


Monopoly is that type of market where there is a single seller and large number of buyers. There is absence of close substitutes to the products.

Features :(a) Single seller and large number of buyers.

(b) Restrictions on the entry of new firms.

(c) Absence of close substitutes.

(d) Full control over price

(e) Price discrimination.

(f) Price maker

(g) Downward sloping less elastic demand curve.

AR or MR Curve in Monopoly market :

AR (Demand) Curve slopes downward from left to right and less elastic than that of monopolistic competition. It means that to increase demand, he has to reduce the price.

Given the demand for his product, the monopolist can increase his sales by lower­ing the price, the marginal revenue also falls but the rate of fall in marginal revenue is greater than that in average revenue.

A monopolist either decides price or output. He cannot decides both at a time.


It is that type of market in which there are large number of buyers and sellers. The Sellers sell differentiated product but not identical. The products are close substitutes of each other.

Features :(a) Large no. of buyers and sellers

(b) Product Differentiation: The products of each firm is differentiated from the other on the basis of colour, taste, packing, trademark, size and shape.

(c) Selling Cost: Cost on advertisement and sales promotion.

(d) Free entry or exit of firms.

(e) Lack of perfect knowledge.

(f) Partial control over price.

(g) Imperfect mobility: Factors of production and products are not perfectly mobile.

(h) Elastic and downward sloping demand curve.

AR or MR in Monopolist Market:

AR (Demand) Curve is left to right downward sloping curve and more elastic / flatter than that of monopoly. It means that in response to change in price, the change in demand will be relatively more for a monopolistic competitive firm than a monopoly firm.

AR and MR curves are both downward sloping because more units can be sold only by lowering the price. MR lies below AR.


Oligopoly is the form of market in which there are few sellers or few large firms, intensely competing against one another and recognising interdependence in their decision-making.

Features of Oligopoly

(a) Few Sellers

(b) All the firms produce homogeneous or differentiated product.

(c) Under oligopoly demand curve cannot be determined. It has a kinked demand curve.

(d) All the firms are interdependent in respect of price determination.

(e) Price rigidity.

On the basis of production, oligopoly can be categorised in two categories:

(i) Collusive oligopoly is that form of oligopoly in which all the firms decide to avoid competition and determine the price and quantity of output on the basis of cooperative behaviour.

(ii) Non-collusive oligopoly is that form of oligopoly in which all the firms determine the price and quantity of output according to the action and reaction of the rival firms.

on the basis of product differentiation,Oligopoly,can be categorised in two categories:

(i) Perfect Oligopoly: The Oligopoly is perfect or pure when the firms deal in the homogeneous products.
(ii) Imperfect Oligopoly: Whereas the Oligopoly is said to be imperfect, when the firms deal in heterogeneous products, i.e. products that are close but are not perfect substitutes.

Equilibrium Price: The price at which the quantity demanded and supplied are equal is known as equilibrium price.

Equilibrium quantity:The quantity demanded and supplied at an equilibrium price is known as equilibrium quantity.

Market equilibrium is a state in which market demand is equal to market supply. There is no excess demand and excess supply in the market.

Application of Demand of Supply

(a) Maximum Price Ceiling: It means the maximum price the sellers are allowed to charge less than equilibrium market price. Government imposes such a ceiling when it finds that the demand for necessary goods exceeds its supply. That is, when consumers are facing shortages and equilibrium price is too high. Government does it in the interest of consumers.

Excess demand may be fulfilled by:(a) Rationing (b) Dual marketing

(b) Minimum Price Ceiling: It means that producer are not allowed to sell, the goods below the price fixed by Government, When government finds that equilibrium price is too low for the produce, then Govt. fixes a price ceiling higher than equilibrium price to prevent the possible loss to the producers. The price is also called floor price or minimum support price. Generally, government buys the excess supply at this price.

Forms of Market and Price Determination class 12 Notes Economics

  • CBSE Revision notes (PDF Download) Free
  • CBSE Revision notes for Class 12 Economics PDF
  • CBSE Revision notes Class 12 Economics – CBSE
  • CBSE Revisions notes and Key Points Class 12 Economics
  • Summary of the NCERT books all chapters in Economics class 12
  • Short notes for CBSE class 12th Economics
  • Key notes and chapter summary of Economics class 12
  • Quick revision notes for CBSE board exams

CBSE Class-12 Revision Notes and Key Points

Forms of Market and Price Determination class 12 Notes Economics. CBSE quick revision note for class-12 Chemistry Physics Math’s, Economics and other subject are very helpful to revise the whole syllabus during exam days. The revision notes covers all important formulas and concepts given in the chapter. Even if you wish to have an overview of a chapter, quick revision notes are here to do if for you. These notes will certainly save your time during stressful exam days.

To download Forms of Market and Price Determination class 12 Notes Economics, sample paper for class 12 Physics, Chemistry, Biology, History, Political Science, Economics, Geography, Computer Science, Home Science, Accountancy, Business Studies and Home Science; do check myCBSEguide app or website. myCBSEguide provides sample papers with solution, test papers for chapter-wise practice, NCERT Forms of Market and Price Determination , NCERT Exemplar Forms of Market and Price Determination , quick revision notes for ready reference, CBSE guess papers and CBSE important question papers. Sample Paper all are made available through the best app for CBSE students and myCBSEguide website.

myCBSEguide App

Test Generator

Create question paper PDF and online tests with your own name & logo in minutes.

Create Now
myCBSEguide App


Question Bank, Mock Tests, Exam Papers, NCERT Solutions, Sample Papers, Notes

Install Now

Leave a Comment