Market Structures and Monopoly
What is a Market Structure?
A market structure is an economic model that helps economists examine the nature and degree of competition among businesses in the same industry.
What is a Monopoly?
A market structure in which one one seller sells a product for which there are no close substitutes. The term monopoly may be used for either market structure or monopolistic business.
Advantages of disadvantages of a Monopooly
1. Usually leads to innovation
2. More efficient in production.
1. Prices are ridiculous
2. Lack of variety
There are several different types of market structures, they include:
1) Monopolistic Competition
Types of Market Structures
Competition where there are many sellers that offer similar products but they all differ from each other in a way.
Apple's iPhone and Android's line of smart phone dominate the market currently. The typical smart phone runs off of either iOS or Android operating system. They're both the same thing but dominate the market while at the same time not being seen as a standardized product.
Types of Monopolies
Natural Monopoly: A market situation in which the costs of production are lowest when only one firm provides output.
Government Monopoly: A monopoly that exists because the government either owns sand runs the business or authorizes only on producer.
Technological Monopoly: When a firm controls a manufacturing method, an invention, or a type of technology.
Geographic Monopoly: Where a producer or seller controls a certain region.
A market structure in which only a few sellers offer similar product, is less competitive than monopolistic competition. An oligopoly, a few large firms have a large market share percent of total sales in a market and dominate the market.