Market Structures

Monopolistic Competition

Overview

It is a market structure in which a business has a large amount of competitors which are originally standardized but are then changed depending on the company.

Characteristics

Every Business makes different decisions about how much it spends based on the product its selling, the market its in, and how much it would cost to produce it.

There is freedom to enter and exit the market with no major barriers in the way.

Each and every product is differentiated based on design or the way its advertised.

Advantages

No barriers for entering or exiting market

More efficient than a monopoly

Different products means more consumer choice

Disadvantages

Differentiation isn't always cost effective or offer any utility

The seller has no control over the prices

Examples

There are multiple types of laptops that all look and operate differently

Oligopoly

Overview

An oligopoly is when only a few businesses are competing against each other

Characteristics

A small amount of sellers

Standardized products for the industry but differentiated for the consumers

They have some control over the price of the product

There is a significant number of barriers in order to enter or exit the market

Advantages

The larger amounts of profit when compared to a monopolistic market can result in more efficiency and higher quality products

Better price stability because of more control over prices

Disadvantages

Less options for consumer choice

Less competition could mean that prices are going to become higher

Large barriers of entry

Example

Competition between Coke and Pepsi

Monopoly

Natural

When a single company has the lowest production cost for a specific product. Natural monopolies usually have a very high cost to operate making it difficult for more than one business to operate.

Geographic

Geographical monopolies are when only one company can give a specific product or service within a specific area. Small towns usually have a limited amount of places to get products or services from.

Technological

When the product a business offers has been patented by that specific business and therefore cannot be replicated by others. Like a drug that cures a certain type of cancer is the product of a certain company and can only be produced by that company for a period of time.

Government

When a government runs a specific business or only allows a single business to run concerning a specific product or service. This is usually used for things that are too expensive to have multiple companies run.

Sources

Comment Stream

2 years ago
0

Good sources and the lists of characteristics were good for the first two as well. However there are no advantages or disadvantages for the monopolies.

2 years ago
0

Structure of the information was very organized and easy-to-follow. Missing some information regarding Monopoly but overall provided good explanations and textual support.

2 years ago
0

Very organized and clearly labeled sub sections. I also like the pictures.

2 years ago
0

Great organization. Easy to read and understand I also liked your use of visuals to better explain your topics as well. Good job!

2 years ago
0

Great sources and great visuals, the text was formatted in a unique way which made it stand out from the rest of the crowd, great job

2 years ago
0

Your pictures are lovely and you kept your page well organized. It is very attractive meaning the colors aren't dull and neither are the patterns. I feel like maybe you can add a little more information but other than that good job!

2 years ago
0

You used a lot of informative sources and your visuals were very descriptive. Next time, you could used more information.