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.
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.
-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
-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.
-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.
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.
-No barriers to entry
-Firms can only make normal profits
-Street food vendors
The market condition that exists when there are few sellers, as a result of which they can greatly influence price and other market factors.
-Industry Dominance by few large firms
The model of monopolistic competition describes a common market structure in which firms have many competitors, but each one sells a slightly different product.
-Seller determines price
-no major barriers to entry
-Large numbers of independent firms competing in market
-Advertising largely used
-GAP v. Old Navy
-Nike v. Adidas