Market Structure System Swag

Market structures is defined as the characteristics of a market that influences the behave and results of what the firms are doing in the market. There are three main types of market systems: Monopolistic Competition, Oligopoly, and all the other stuff that falls under Monopoly and such.

Monopolistic Competition

This is a competition that occurs when there are multiple sellers within the marketplace and they are all selling similar, however not standardized, products to the consumer.

Toilet paper is an example of monopolistic competion within the American society.

Advantages

The market suits newer or upcoming businesses due to the fact that there is not a significant barrier to entry. This makes the market more contestable.

Due to the differences within the market, it creates diversity and choice for the consumer. There are many different types of product makes it possible for each product to be subjected to certain people groups.

This type of market is more efficient than a monopoly as it makes sellers having to develop new ways to get the attention of and even keep the consumer into buying their product.

Disadvantages

The differences in a multitude of a similar product creates a lot of unnecessary waste, such that producers would be making a lot of advertisements and such to get the consumers to buy their product, which just creates a lot of waste.

This market system is both inefficient in the long and the short run as the prices of the products are above the marginal cost in both cases. Though it is more efficient in the long run than in the short run, it is still inefficient.

Hotels are another example of monopolisitic competition.

Oligopoly

This is a market structure that occurs where are few sellers and producers offering a similar product within the same market to many consumers. Basically, it is when the few rule over the many.

Operating systems companies for a computer are an example of an opigopoly.

Advantages

The oligopolies may be able to obtain a highly competitive strategy, as each company is wanting to dominate the other within a certain market field. This means that would obtain the same benefits as more competitive market structures, such as a lower price on their product.

Oligopolists may become more efficient in the fields of innovation, new product, and process development. Due to the amount of profit they make, they usually make innovates towards many aspects of their company, in which the consumer may be able to reap the benefits.

Oligopolies usually have price stability, in which the prices for a product doesn't change much over long periods of time. This can help the consumer as they can usually plan ahead to see what they can and cannot buy within a certain period of time.

Disadvantages

Since there are only a few sellers and producers, the consumer doesn't have a lot of choices in what product they want to buy or not buy.

New companies will have a hard time trying to get into an oligopoly due to many barriers to entry, such as predatory pricing, limit pricing, and a strong brand that they will have to compete with as per usually that strong brand is what is controlling the market at that moment.

If the companies form a cartel-like marketing structure, than it could lead to higher prices and less of the product for the consumer to have to buy.

If there are about 2-3 or so companies that are dominating the market, that they may allocate their resources and make their product inefficiently due to the fact that they are making so much money, they don't really care about how efficient they are.

The soda market is another example of an oligopoly as Coca Cola and Pepsi are pretty much controlling the market.

Types of Monopolies

Monopolies are when there is one companies that is commanding a certain part of the market. However, there are many different types of monopolies that fall within this area, such as natural monopolies, geographical monopolies, technological monopolies, and government monopolies.

Natural Monopolies

This type of monopoly occurs when there is a very high fixed cost or other barriers to entry that it becomes more efficient for the consumer to just have have one producer to provide the product than to have multiple producers to provide the product.

Tap water is seen as a form of natural monopoly as it is would be rediculous to have multiple companies provide the same tap water.

Advantages

The natural monopolies usually are very efficient with their resources as it would be impractical if more than one company were to provide the same service.

When more of the product is being produced, the cost for that product will decrease, which will offer substantial benefits for the consumer and such.

Disadvantages

Firms are the price setters as there is very little competition within this field, as there are no suitable substitutes that the consumers are able to buy.

They also have no incentive to provide any new products ans such due to the little to no competition.

Electricity companies are a form of natural monopolies.

Geographical Monopoly

This is a monopoly that occurs when a producer or seller has control over a certain area of land due to there being no other substitutes with this said area, which, if consumers want that producer, forces consumer to go and buy the product from that one producer.

Restruant chains are a type of geograpical monopoly if there is no other good restruants near a certain area.

Advantages

Since the product is only in a certain region, it makes more profit for the companies, which can be used to make production more efficient and better for all consumers.

There will be less waste used due to the fact that other companies will not be advertised the same product that the producer will have a monopoly on.

Since it is restrained to a certain area, there will be more productivity within that area due to the fact that the consumers will have to go to that are in order to obtain the said product.

Disadvantages

There is many barriers to entry for a producer that wants to sell the same or even similar product if that producer wants to be able to prosper within a certain area of the market.

If that producer were to stop making a product within that area, then there are really no other substitutes that the consumer will be able to get to as that producer was the one controlling the market in that area.

If a consumer were to hate the product in that geographical space, then that consumer would have to go way out of their way to find a substitute that they feel like getting, creating less diversity within that specific area.

Sports are an example of a geographical monopoly. If you want to see a team play, you have to go to their state.

Technological Monopoly

These monopolies occur when there is a product and/or service that a company has that has legal protection in the forms of patent or copyrights. These monopolies usually create new products that have no substitutes due to the fact that it is original and such.

If a company were to make a new medication in which it cures Crohn's Disease would have a monopoly in this field.

Advantages

These monopolies create more innovations and advancements within the society of America and the rest of the world.

These monopolies, unlike geographical monopolies, are not restricted to one area and every consumer is able to obtain the product.

The monopoly only last as long as the patent for that certain product, which is about 20 years. This is enough time for the more and even new innovation to come out.

Disadvantages

These monopolies are protected by patents and other legal documents, meaning that if a company were to make a substitute that was even close to the patent product, then that company could be sued and such.

Since no substitutes can be made, the producers are the controllers of the price, which means that they can sell for as high as they want and the consumers, if they want the product, will have to pay the price.

Polaroid's instant camera was a technological monopoly during the 1900's

Government Monopolies

This is a monopoly that is created by the government. This is when a government agency or corporation is the only producer of a certain good/service and any other substitutes of the product are prohibited.

The federal reserve, a government agency, has a monopoly over all monetary policies with the United States of America.

Advantages

The government has monopolies on sector of the nation for the sake of security and so that the products and services that keep America running don't get into other people's hands.

Provides services and goods that could not be provided by firms or other companies due to many factors such as demand, resources, and profit.

Prices are usually stabilized to a certain price, so it is very predictable to the consumer what the price of a certain product/service will be and such.

Disadvantages

The government is getting involved with the market and such, which is not the definition of a free-market economy. This gets many people within the American society kinda made.

Other companies may be restricted on what they can sell due to the government having controls over certain parts of the market and the legal barriers that the government puts up.

The government has control of the exploration of space within the United States through NASA, a government agency.

Work Cited

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2 years ago
0

Covered all the main points, but I feel the switching between left and right aligned was jarring

2 years ago
0

I think all of your information was great. I really liked all of the photos that you used to give examples of things like oligopolies and monopolies. - Cole Johnston

2 years ago
0

Lots of good content, I like how you included captions with the pictures.

2 years ago
1

You have exceptional examples, there's no one else that I've seen that has video in thiers. It's full of great information but I feel like you can describe it a bit more. But other than that, it's swagtastic 😎 😄 🎉

2 years ago
0

You put a ton of effort and content into the site, good job m8.

2 years ago
0

Very extensive and informative website

2 years ago
0

Your Website has a lot of information and your use of videos was really impressive. This was the best one so far.

2 years ago
0

Great job again. You had a ton of information and the embedded videos were a good touch.

2 years ago
0

Good, but you left out the characteristics. I like the videos.

2 years ago
0

Good use of videos and pictures to provide adequate backup for the writing