Market and Its Types and National Income

Market and Its Types

Economists understand by the term market not any particular market place in which things are bought and sold, but the whole of any region in which buyers and sellers are in such free dealing with each other that the
price of the same goods tend to equality easily and quickly.

1. Perfect Competition

It is a market situation where there is a large number of buyer and sellers of a homogeneous product e.g., Agriculture Product. In this market a firm does not exercise control over pric

2. Imperfect Competition

It is a competitive market situation where there are many sellers but they are selling heterogenous goods.

(A) Monopolistic Competition :

This Concept was given by chamberlain: in USA. It is a form of
market in which there are many buyers and sellers of a commodity. A product has a large number of close substitutes e.g., Toothpaste,
Soap etc.

(B) Duopoly

A duopoly is a market in which there
are two producers of a product.

(C) Oligopoly

It is a market in which there are few sellers of a product. e.g.: Steel, Aluminium.

3. Monopoly

It is a market situation in which there is only one producer of a commodity with no close substitutes e.g. : Government Industries.

National Income

The average achievement of a country is measured with respect to growth rate of its National Income. National Income refers to the aggregate value of goods and services produced in an economy in one year.

National Income is defined as the total net earnings from  the production of goods and services in a country over a period of time, usually one year and consisting essentially of wages, salaries, rents, profits and interests.

Dadabhai Naoroji was the pioneer in this field. He prepared the first estimates of National Income in 1876.
However, the first person to adopt a scientific procedure in estimating the National Income was Dr VKRV Rao in 1931.

The Government of India appointed National Income Committee in 1949 which presented its first report in
1951. Since 1955 the National Income estimates are being prepared by Central Statistical Organisation

The CSO uses different methods like the Product Method, Income Method, out put method and  Expenditure Method for various sectors in the process of estimating the National Income.

Expenditure Method for Calculating National Income

The expenditure method measure the national Income as the sum total of expenditures made by individuals on personal consumption, firms on private investment and government authorities on government purchases.

In monetary terms its measure are

1. GDP (Gross Domestic Product)

2. NDP(National Domestic Product)

3. GNP (Gross National Product)

4. NNP (Net National Product) 

                    Domestic Product = Domestic Income and National
                                      Product = National Income.
1. GDP (Gross Domestic Product) It is the total market value of all final goods and services produced during
a given time period within a nations’ domestic border.
                     GDP =C+I+G + NX
         where C = can sumption; I = Investment
           G=Government expenditure
                     NX = Net Export

2. NDP (National Domestic Product) Net Domestic Product equals the GDP minus depreciation where depreciation is a reduction in the value of an asset over time.

                                      NDP = GDP – Depreciation
                                  NI = NDP + Net Foreign Income

3. GNP (Gross National Product) Gross National Product equals the GDP plus Net Factor Income from Abroad (NFIA). NFIA is basically any income earned by residents from overseas investment minus income earned within the domestic economy.

                 GNP = GDP + Net factor income from Abroad (NFIA)

4. NNP (Net National Product) Net National Product equals the GDP minus depreciation and plus Net
Factor Income from Abroad. It is also known as National Income.

                                       NNP = GNP – Depreciation

Human Development Report (HDR)

The Human Development Report is an annual report published by UNDP (United Nations Development Programme)

 As per the 25th edition of HDR, with the title ‘Human Development for Everyone (HDR) the Human Development Index (HDI) for india is 0.624 and has been
ranked 131 out of 188 countries.

 HDI measures the average achievements in a country in three basic dimensions of the human development namely a long and healthy life, access to knowledge, and
a decent standard of living.

 The HDI was developed by Pakistani economist, Mahbub-ul-Haq in 1990 and the first report launched by mahbub-ul-Haq along with Amartya Sen in same

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