MARKET STRUCTURES OF THE WORLD
This market structure exemplifies a situation in an economy where many different sellers are producing similar but not standardized products.
Advantages of the Monopolistic Competition include things like a large variation in supply for the consumer, and a large demand provided by the same consumers for "upstart" producers to feed off of.
Disadvantages of the Monopolistic Competition includes situations where the producers start making substitute products that are so poor quality that the consumer may be getting scammed at a particular price point for said low quality product. Another disadvantage is the market is very rarely controlled by the consumer, as it should be in a free market economy, rather it is closely controlled by the producer.
Examples of Monopolistic Competition
T-Shirts: Like it was explained in the book the particular situation with T-Shirts is a perfect example of a monopolistic competition, there are several colors and designs of T-Shirts, yet they all serve roughly the same purpose and are demanded by almost anyone that wants clothing, the only thing keeping people from buying one t-shirt over another is personal preference and style, that is where several producers step in to fit demand for niche markets.
Cell Phones: These are a perfect example of a monopolistic competition where several companies like Blackberry, Samsung, Apple, and Nokia produce devices that have essentially the same primary function (call and text message other phones) but are all unique in there own way providing slightly different services.
An Oligopoly is a simple market structure that probably is the closest model to a free market economy, there are very few large firms or companies, and the small companies that do drive a majority of sales in said market are far less competitive then those in a monopolistic competition.
Advantages of an Oligopoly: The Oligopoly allows for small businesses to flourish, because in this market structure, the little guy is welcome simply because there are little to no large producers and the market is dominated by start-up small time producers.
Disadvantages of an Oligopoly: In an oligopoly, many things can be bad for both the producer and the consumer. The consumer can be hurt greatly in an oligopoly if there are too many small producers competing for their business and attempting to profit, price may not be controlled by the government and it could go haywire and drastically shift supply and demand in a market
Examples of Oligopoly:
Coke and Pepsi: They are both virtually the same product, made by few (two) producers, that have almost absolute control over their market, making a perfect example of an oligopoly.
Airlines: The market of air travel is a perfect example of an oligopoly because it is mainly dictated by a few major companies (Delta, United, Air Canada etc.) and they offer the same service, a flight to any destination that you desire.
The natural monopoly is a unique case in an ecnoomic system where there is a singular producer that has the lowest costs of production, the rest of the companies vying for the same market don't have the same benefit.
Advantages of Natural Monopoly: A natural monopoly is good obviously for that company because in most cases it also gives them a geographic monopoly over the surrounding area of their business, they also are handy to the consumer as they offer some of the lowest prices for their product.
Disadvantages of Natural Monopoly: The natural monopoly makes it difficult for other businesses that have more expensive costs of production to enter the market and start making profit.
Examples of Natural Monopoly:
Big 4 Accounting Firms: The big 4 firms hold a natural monopoly on public accounting around the world, they have the best of the best employees that know how to handle your auditing and other financial needs in the cheapest and most efficient ways possible.
Hydro Corporations: The hydro corporation is a natural monopoly because the company that has the lowest cost of producing the hydroelectric power is the one who will have the most success, for example Toronto hydro holds a natural monopoly in Southern Ontario.
A Geographic Monopoly is one where a particular company controls almost all supply of a product in a particular geographic area or region
Advantages: The advantage of a geographic monopoly is that it gives that singular company complete control over the local markets, they can adjust price as they feel necessary and the only consequence will come from the consumers happiness, they wont lost business to other companies.
Disadvantages: A company that is trying to enter the market will have great difficulty establishing themselves, it also hurts the consumer because the monopoly can simply alter their price to the point where they maximize profit without any concern for the consumer.
Telephone Companies: Most phone companies are the sole provider in their respective geographic areas of the continent, making them all simple geographic monopolies.
Supermarkets in particular areas: A perfect example of a geographic monopoly would be Wal-Mart or some other super store being the only major marketplace in a large, say 100 mile radius, making them the dominant provider in the small market
In this monopoly, one particular company controls the particular intellectual property and sells a particular technology to others, other companies may sell something very similar but not identical.
Advantages: A technological monopoly allows the consumer to make a simple choice when he or she needs to buy new tech gear, they simply will go with the brand name product that has the most known name and product.
Disadvantages: If one company controls too much intellectual property, it limits the advancement of a particular technology to the mental capacity and ability of the scientists and researches of that particular company.
Apple and Microsoft: These two companies control almost all technology associated with operating systems for PCs, they alone control virtually the entire market for the technology. http://www.hongkiat.com/blog/mac-vs-pc-myth-bustin...
A government monopoly is a unique case where a particular branch of government controls a department that controls the marketplace for a particular service or product.
Advantages: The general public usually benefits from the service or product that is provided so the tax payer has some sort of pride knowing that his or her tax dollars are going back into a service provided to them
Disadvantages: Government monopolies do not take lightly to privatization and companies attempts to enter the market with similar and more efficient services, these force Government monopolies to constantly struggle with the private company beast. http://www.forbes.com/sites/adamhartung/2011/12/06...
The United States Postal Service: This is a perfect example of a company that is run by the government and provided at the expense of the tax payer, it is however also struggling greatly with the private companies that consistently take their business.