There are a few market structures, but the three main are Perfect Competition Markets, which is where there is an equal amount of competition and each firm and producer has a chance of selling product. There is also Monopolies, which is where one firm controls the market, and provides guidelines for what is sold and how much people pay for it. There are natural, technological, Government and Geographical monopolies. There is also the Oligopoly, which is where a few firms control a market much like a monopoly, but they do it usually purely for profit.
- It's unfavorable to have monopolies over natural resources and needs (specifically utilities) because they're something most people can't live without.
- Natural monopolies also tend to have higher fixed costs than other markets, making it impractical for there to be a lot of competition.
- Therefore, things in those fields are usually very monopolistic because of that reason.
- Advantages: Keeps costs relatively low for consumers, or at least keeps them fixed because they are one company so there's no competition.
- Governmental control of a service or production (but usually the control of a service). The USPS is a good example
- Advantages: Strict, regulated control of what the prices are set at, generally lower prices
- Disadvantage: Government has strict control over what the prices are and who is given service, as well as the quality of the service. Some may see this as a downfall as they prefer to have less government control over their lives, not more.
- A technological monopoly is where a company controls a manufacturing aspect, a technology utilized heavily in a market, or something else that controls the processing of a market. They only exist because of the method or technology that the company controls, and are different from the other types of monopolies because of that.
- Geographical monopolies occur when a business or a group have reign over a market because of their location, or their ability to have control over where they can market and where they can sell. A great example of this is a fast food chain, because they can be anywhere in the world at this point, and where they're consolidated, they tend to offer good enough deals to take over business.
- Oligopolies exist when a few firms or groups control and share a market for profit usually. An example of this is major airliners, who share around the same high rates and offer the same amenities so that people don't have much of a choice but pay an inflated price if they want to fly nicely.
- Monopolistic competition is a situation where there are multiple firms selling similar but not identical products, which results in a drop on price and attempts to bring rise in demand for a specific product to give one company more edge over the