Four different types of market structures would be perfect competition, monopolistic competition, oligopoly, and then the monopoly.
The perfect competition is a kind of market in which there are many companies or players that are making an identical kind of product. By definition that means a market structure in which the following five criteria are met: 1) All firms sell an identical product; 2) All firms are price takers - they cannot control the market price of their product; 3) All firms have a relatively small market share; 4) Buyers have complete information about the product being sold and the prices charged by each firm; and 5) The industry is characterized by freedom of entry and exit. Perfect competition is sometimes referred to as "pure competition". The market that most represents the perfect competition would be the agriculture. Here in Medford, Oregon the pear industry would be our example of the perfect competition. We have many growers, growing our wonderful and delicious pears, and then selling them to one of the two distributors who would then sell to all parts of the world. The next type of market structure on our list would the monopolistic competition.
Monopolistic competition describes an industry composed of a large number of sellers, of which each of these sellers offers a different but yet similar product, which is a good or service that has real or imagined characteristics that are different from those of other goods or services. “This differentiation can take many forms. The salespeople may be nicer, the packaging prettier, the credit terms better, or the service faster” (Amacher & Pate, 2013). These characteristics make competition with an area v...
... middle of paper ...
...heir market, from new providers with superior supplies or subsidized pricing. While opening this market will mean a reduction in price available to the oligopoly, this may be only short-lived. Once the new alternative has established some brand loyalty, and perhaps eliminated an inefficient competitor, they will raise prices and act as the oligopoly they replaced.
Monopoly vendors faced with international competitors are most likely to lose the monopoly, as opening markets to international trade will overcome the traditional barriers to entry problem, and reduce prices by expanding supply with a new lower price to notify customers of a new buying option. When a product made elsewhere is delivered for a lower price than is being delivered domestically, governments will support the notion, and drive prices down until product differentiation is factored into the buying.
Need Writing Help?
Get feedback on grammar, clarity, concision and logic instantly.Check your paper »
- Introduction Four different types of market structures would be perfect competition, monopolistic competition, oligopoly, and then the monopoly. Perfect Competition The perfect competition is a kind of market in which there are many companies or players that are making an identical kind of product. By definition that means a market structure in which the following five criteria are met: 1) All firms sell an identical product; 2) All firms are price takers - they cannot control the market price of their product; 3) All firms have a relatively small market share; 4) Buyers have complete information about the product being sold and the prices charged by each firm; and 5) The industry is charact... [tags: Perfect competition, Monopoly, Supply and demand]
1807 words (5.2 pages)
- Market structure refers to the amount of competition that exists in the market between producers. The degree of competition can be thought of as lying along a continuum with very competitive markets at the end and markets in which no competition exists at all at the other end. The different types of market structures are as follows: 1) Perfectly Perfect competition describes a market structure where competition is at its greatest possible level. To make it more clear, a market which exhibits the following characteristics in its structure is said to show perfect competition.... [tags: Monopoly, Oligopoly, Perfect competition]
725 words (2.1 pages)
- I have been hired as a consultant by the mayor to look at the various market structures. In order to fully analyze the market structures I will explain in depth the different types of market structures, one example of a market structure here in Smallville, Ohio, I will also share how high entry barriers into our market will affect the profitability in the long term sense, competitive pressures that are present in high barriers to entry, the role of the government and how it affects each of the different market structures ability to price its products and the effect of international trade on each of the different market structures.... [tags: competition models]
2662 words (7.6 pages)
- Monopoly and oligopoly are two economic market conditions. Both of them are likely to co-exist in our world and they differentiate from each other. In this written paper, I will describe the two market conditions. I will describe the characteristics of each one of them in terms of number of suppliers, product differentiation, advantages and disadvantages and the most challenging types of barriers to entry that exist in both of the market structures. A monopoly is a market structure in which there is only one producer/seller for a product or service.... [tags: market structures, consumers]
1401 words (4 pages)
- Markets are different, without these different markets there would not be any structure. Being able to understand different markets and its language, like demand, supply, average variable cost and marginal costs we can better prepare for economic and financial future. The market structure and the interaction that occurs can be defined by the number of businesses, and barriers new firms have when entering a particular market. Perfect competition, monopoly, monopolistic and oligopoly are four forms of market structures recognized by economists.... [tags: Economics]
1431 words (4.1 pages)
- There are four major market structures; perfect competition, monopolistic competition, oligopoly, and monopoly. Perfect competition is the market structure in which there are many sellers and buyers, firms produce a homogeneous product, and there is free entry into and exit out of the industry (Amacher & Pate, 2013). A perfect competition is characterized by the fact that homogeneous products are being created. With this being the case consumers have no tendency to buy one product over the other, because they are all the same.... [tags: Competition, Monopolistic, Oligopoly, Monopoly]
1239 words (3.5 pages)
- In this following report I will discuss the phone industry and analysed it in great detail. I will analysis the market structure and try and understand why the mobile industry falls to heavily oligopoly structure. I will highlight all the structures, however I will discuss in detail how, for example Vodafone can be incorporated in the porter’s five forces method to show how the mobile industry has devolved over the years and to understand if consumers are driven by the actual technology of the phone but if it driven more by style.... [tags: mobiles, market structures, competition]
1777 words (5.1 pages)
- Understanding and developing a pay structure can greatly influence an organization’s culture, effectiveness and ultimately their success. Pay structure is one of the most important fabrics in a healthy compensation plan. The structure and communication of the plan will separate aspiring plans from those plans that achieve long-term success. Pay structure often differentiates itself through various types and methods. A trending approach on the current market is broad banding. The broad banding theory is about creating a flatten hierarchy.... [tags: broad banding, team development, management]
740 words (2.1 pages)
The Structure Of The Market Structure Of Oligopoly And The Difficulty In Predicting Output And Profits
- The Structure Of The Market Structure Of Oligopoly And The Difficulty In Predicting Output And Profits Market structure of oligopoly Oligopoly is a market structure where there are a few firms producing all or most of the market supply of a particular good or service and whose decisions about the industry's output can affect competitors. Examples of oligopolistic structures are supermarket, banking industry and pharmaceutical industry. The characteristics of the oligopoly are: Small number of large firms dominate the industry High degree of interdependence: the behaviour of firms are affected by what they believe other rivalry firms might do High barriers to entry that restrict new... [tags: Economy Economics Market Business]
1648 words (4.7 pages)
- Types of Societies A society is made up of people living within defined territorial boarders who share a common culture. A society is independent of outsiders; it contains many smaller social structures that are needed to meet the needs of its members. Some of the social structures include family, economy and religion. Societies meet their members’ basic needs, such as the needs for food and shelter, in different ways. Anthropologists used these differences to form the basis of a system that is they often use to classify societies.... [tags: History Society Economy]
934 words (2.7 pages)