Market Structures

             Market structure is  the organisational and other characteristics of a market. There are many different types of structures: Perfect Competition, Monopoly, Oligopoly, and Monopolistic Competition. Each of these structures has its advantages and                                                                                       disadvantages.                                            

Monopoly

A situation in which a single company or group owns all or nearly all of the market for a                                                      given type of product or service.

                                                                 Characteristics:

-Only one seller   

-Many buyers in the market    

-The seller controls the prices

-There are barriers to entry    

-Consumers don't have all the information  

-no substitutes

                                                                   Advantages:

-Monopoly avoids duplication and hence wastage of resources.

-A monopoly enjoys economics of scale as it is the only supplier of product or service in the market. The benefits can be passed on to the consumers.

-Due to the fact that monopolies make lot of profits, it can be used for research and development.

-Monopolies may use price discrimination which benefits the economically weaker sections of the society.

-Monopolies can afford to invest in latest technology and machinery in order to be efficient and to avoid competition.

                                                            Disadvantages:

-Poor level of service.

-No consumer sovereignty.

-Consumers may be charged high prices for low quality of goods and services.

-Lack of competition may lead to low quality and out dated goods and services.

                                                             Examples:

-Google

-Windows

-Netflix

-Facebook

Perfect Competition

Perfect competition is the opposite of a monopoly, where only a single firm supplies a particular good or service, and that firm can charge whatever price it wants. This is because consumers have no other choice but to buy their product from this firm.

                                                                 Characteristics:

-Perfect knowledge  

-No barriers to entry   

-Homogenous products  

-Firms can only make normal profits

                                                                    Examples:

-Agricultural Markets

-Street food vendors

-Free Software

Oligopoly

The market condition that exists when there are few sellers, as a result of which they can                                        greatly influence price and other market factors.

                                                                  Characteristic:

-Industry Dominance by few large firms   

-Homogenous products    

-Interdependence

-Entry Barriers   

-Non-price Competition    

-Profit Maximization

                                                                    Examples:

-Steel industry

-Aluminum

-Film

-Television

-Cell phone

-Gas

Monopolistic Competition

The model of monopolistic competition describes a common market structure in which firms have many competitors, but each one sells a slightly different product.

                                                                  Characteristics:

-Seller determines price

-no major barriers to entry

-Large numbers of independent firms competing in market

-Profit Maximizers

-Fierce competition

-Advertising largely used

                                                                 Examples:

-GAP v. Old Navy

-Nike v. Adidas

Comment Stream

2 years ago
1


Great explanations! I love the addition of the court cases but would have liked a few more pictures.
🐉 🐉 🐉 🐉 🐉

2 years ago
1

I liked how you set up your website and each section was clearly identified. All the content is there, however you lacked images!

2 years ago
1

I liked the examples you used in your tackk. I learned a lot of information while reading, I think I'm going to retackk this.:raise d_hands:

2 years ago
1

You left out some advantages and disadvantages, but what you do have is well written.

2 years ago
1

Very informative, needs more visuals though

2 years ago
1

I liked your examples. Needs more visuals