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Hindu Temples Market Study

This document summarizes a case study on the market behavior of Hindu temples in India. It examines the market structure and potential of religious temples as a monopolistically competitive industry. The methodology involved surveying 18 temples in West Bengal to estimate costs, revenues, visitor numbers, and profit maximization. The analysis found that temples act like firms in monopolistic competition, with many small entities, free entry and exit, and inability to influence overall market prices. While temples earn short-term profits, normal profits are earned in the long-run as costs increase due to land rents and other payments.

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Akash Pushkar Charan
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139 views9 pages

Hindu Temples Market Study

This document summarizes a case study on the market behavior of Hindu temples in India. It examines the market structure and potential of religious temples as a monopolistically competitive industry. The methodology involved surveying 18 temples in West Bengal to estimate costs, revenues, visitor numbers, and profit maximization. The analysis found that temples act like firms in monopolistic competition, with many small entities, free entry and exit, and inability to influence overall market prices. While temples earn short-term profits, normal profits are earned in the long-run as costs increase due to land rents and other payments.

Uploaded by

Akash Pushkar Charan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

Monopolistic competitive market

in
religion: a case study of Hindu
temples
Presented by :
Priyank Sinha
Gajbhiye
Manohar Giri
Sharma
Mayur Gupta

Reshant
Anjali

INTRODUCTION
Objective of the case-study
Study of the market behaviour of the Hindu temples
in India.
Examine the market structure & market potential.
Prior similar studies conducted
Adam smiths study on Medieval Catholic Churches.
Iannacccones insights on public religion.
Relevance of these studies in Indian context.

Methodology
Tool of research Survey.
Area of study State of West Bengal

- Annual growth rate of place of worship in W.B. >


compared to national growth rate of same.
- % share of no of places of worship in W.B. 1991(
8.41%) n 2001 (9.52%) > other states in country.
- Sample Size: 18 temples ( Kolkata and North 24 pargans ).
- With [Link] of 8.6% and 11.7 %

- Average no of visitors : 80180/year (220/day).


- 5% of Avg. Visitors surveyed/ day to estimate the revenue

earning.

Estimation of Cost and Revenues


Functions
Total Cost of temple/day is a linear function of no.

of daily visitors of temple.


TC= 107.9967 + 0.2851697*Vq
TC= Total Cost / day incurred by temple
Vq= No of daily visitors
If Vq increses, TC increases.
AC function and MC function of a temple are
derived from this equntion(Cost Function).


AR=6.881035-0.01029*Fq
AR- average revenue earned by temples
Fq- Freq of visit by a visitor

Nature of the Market


Ar is slightly Negatively Sloped indicating it

doesnt follow Monopoly.


A large number of small temples with easy entry
and exit like perfect competition
The actions of any single temple do not have
significant effect on other temples in the market monopolistic competition model rather than the
pure monopoly model.

Profit maximizing output in monopolistic

competition
occurs at the number of visitors (Fq ) where
MR=MC.
P* is determined by Demand Curve.
By solving Equation for MC, AR and MR we get
the profit maximizing output, Fq =320 and
P=3.58.
Estimated Fq* (320)> Fq (220)
Estimated P* < P average contribution (5.21)
made by a visitor per visit to a temple.

Conclusions
Like monopolists, Hindu temples earned short-run economic profits

when cost of land was not significant(Fig. 1). Those economic profits
induced other temples enter into the market.
the downward shift of the long-run AR curve
the long-run AC curve in the case of temples shifts upwards, because in
the long-run if the rent of land is incorporated, then the average costs
incurred by the temples increase.
some under the table payments, which ultimately increase the total
cost of running the temples in the long-run. As a result, the profits
earned from the temples decline in the long-run. Hence, it may be
inferred that each temple earns only the normal profit in the long-run.

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