Monopolistic Competition And Perfect Competition

1.0 Introduction:

In economics world, there are four different market structures: Monopoly, Oligopoly, Monopolistic competition and Perfect competition. Monopoly is a structure where there is one dominant firm, which sets very high barriers for other companies to enter, thus leading the market. Products offered in this market are very unique. Oligopoly is a similar market structure with few firms instead of just one, which also restricts entry to companies, but if tried the company can find a way to enter this market. Monopolistic competition exists of many firms, where the entry to the market is unrestricted. In this market structure, companies must differentiate their products from each other, but essentially, they will be serving the

This is a huge advantage for the customers as they get to buy the products they want and need for a considerably cheap price. Businesses also benefit from this, since more people are going to buy the goods and it will encourage businesses to produce as well as boost the economy (“Europa”). 2.3.3 Rivalry

As human beings, we always compete with each other to get what we are looking for. Perfectly competitive markets are created if it is known that the customers will compete to get the good or service. The sooner customers get something the cheaper it is going to be, thus leaving them no choice but to fight for what they want. Making sure that the rivalry continues is a big part of all competitive markets especially in perfect competition. Supply of goods can get lower, which will allow producers to set a higher price, knowing that consumers will still be willing to pay

The main feature of farmers markets is that there are no intermediaries involved in the selling process. The word ‘local’ is mentioned a lot in this marketplace, since all the products sold must be produced locally. It is considered to be an easy way for producers to sell their products, without having to pay the intermediaries for the job they could do themselves. The Farmers market comes with rules, that ensure that only local farmers products are being sold and some markets have even created their own definitions to clearly address the characteristics of the market. The objective between this market is to provide fresh products and guarantee that they are from a farm. Although the products here are known to be healthier than in grocery stores, studies also show that the prices in Farmer’s markets are cheaper. Just like any other market types, the producers here will charge the price that will cover the costs and won’t add anything extra for a brand name or special features. Farmer’s market is known to be very close to perfect competition and shares essential features with it (“Farmers Market