Image source: http://www.bedroomchecker.com/wp-content/uploads/2013/08/Hong-Kong-Market.png
In monopolistic competitions, there are many competitors that offer similar products at different prices. There are so many competitors that not one runs the market and there is plenty of choice among them for the consumer. They offer similar but different products, like t-shirts, that many tourist shops (like the one pictured above) offer. While they all offer shirts, the images / logos often differ, and that is one of the distinguishing factors between them. Shown below are examples:
Image sources (in respective order)
The audience that would purchase one of these shirts would most likely not be interested in the other due to difference in interest. It would be easy for anyone to enter / exit the market, and no one would have control over the set prices. Anyone could set whatever price they wish, however the amount of profit made is often determined by the prices.
Monopolistic competitions are often heavily laden with advertisers, that way you choose x manufacturer instead of y, due to lots of non-price competition. This can both be of benefit and also be annoying to consumers, especially nowadays with the internet and popup advertisements like those shown below.
Image source: http://o.aolcdn.com/hss/storage/midas/fa9b534892464058aea0242965e04401/200586432/pop-ups.jpg
In an oligarchy, a few people sell many products, like this cereal. There are many types of cereal, like those shown above, available on the market, however only a few vendors, due to the high power of those that are already in place. While no individual company completely controls the market, it is harder to get into due to less positions available for the market. There is stricter control of the now highly concentrated market, and the prices are often less flexible.
Benefits include having more than one producer as well as the ability to make more profits, plus having lots of reputation makes it easier for customers to have someone that they can trust, as a well-known company that has a reputation will most likely have an easier time getting customers. However, price control and predatory prices that beat out any competitors that try to get in.
Examples of oligarchies are the cereal industry (like that shown above) as well as the film industry; only a few companies run it
Monopolies. Monopolies are when one company controls the entire industry. There are four main types of monopolies, and not all of them are necessarily negative, like they are made out to be...
A technological monopoly is a monopoly in which there is only one seller due to patents. To see what a patent is / file for a patent, click here:
The positive thing about technological monopolies is that trademarks are respected / people don't have to worry about others stealing their work, however the negative side of these is that having no competition means that the manufacturer has full control of price ranges until the patent expires. And, technological monopolies only last as long as their patent does.
Natural monopolies are those in which it would not be efficient / useful if there were more than one company that was a part of the system. A majority of public utilities, such as this power plant shown above, are natural monopolies.
Benefits to natural monopolies mean that there would not be much wasted land / resources, which benefits the environment and people, however having only one source means again, full price control, however their prices are often reasonable due to the high amount.
Geographic monopolies are those of which the monopoly is based on the location, meaning that they can afford to raise prices and still make profit due to the fact that they are often the only one around, like this clown motel in the middle of nowhere. Geographic monopolies also refer to products / services that are found no where else, like the NFL. People from around the world come to the US to be able to watch football games.
A positive factor to these is that the producer benefits from being needed, however a negative factor is that they can (and often do) make their prices ridiculous simply because they are the only ones around and can afford to.
Government monopolies are monopolies set by the government because it would be a bad thing if there were competitions between these companies, like Lockheed Martin. These companies were set by the government to perform specific tasks that are paid for by taxes, like provide for the military / provide services that would not be efficient if individual companies tried to make profit off of them, including the postal service / garbage companies.
A benefit to these is that they are constant and often less expensive (for consumers) than if they'd be done by an individuals and prevents harmful competition for military needs, however it is impossible for anyone to enter / exit the market.