Market Structures
Tre Perry

Monopolistic Competition

Overview

A monopolistic competition is like an imperfect competition in which there are many sellers selling many differentiated products (which may be based on branding or quality) at varying prices with no close substitutes.  

Characteristics

Some characteristics of monopolistic competition is that they are selling similar but differentiated products and that there are many sellers and many buyers. Since there are many sellers and many buyers the sellers act independently and chose what product to produce, how much to produce, and what price to charge.

Advantages

It is easy for new firms to enter and leave the market without facing many barriers in pure monopoly markets. Another advantage is that it requires that consumers become more informed about the products and services available in the market

Disadvantages

Though the market is free and open to other companies, a local company often can raise the prices on their products without attracting competition.

Oligopoly

A Farmer's market is an example of an Oligopoly

Overview

An oligopoly is when market dominated by a small number of participants who are able to collectively exert control over supply and market prices.

Characteristics

Some characteristics of an oligopoly is that there all the products are very similar. There are similar products due to another characteristic which is the few number of sellers that are in the market.

Advantages

Generally, a business will fear losing customers should it raise prices, since the competitors will not follow suit. When a business lowers its price or offers a discount, the others likely will cut prices to avoid losing their share of the market.

Disadvantages

New firms cannot enter the market easily due to various barriers of entry. Another disadvantage is Oligopolies tend to breed cartels, in which the firms agree to fix prices normally raising them and lower product quantities to increase their profits.

Monopoly

Apple are the only people that produce iPhone's

Overview

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

Some characteristics of a monopoly are a single firm selling all output in a market, a unique product, and restrictions on entry into and exit out of the industry

Advantages

  • Monopoly avoids duplication and hence wastage of resources.
  • 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.

Natural Monopoly

Most public utilities are natural monopolies such as the water treatment facility

Overview

A market situation in which the costs of production are lowest when only one firm provides output.

Characteristics

Some characteristics of a natural monopoly is that there is only one producer of the product and the current situation in the market makes the cost of production low

Advantages

An advantage of a natural monopoly is that the costs of productions are lowest allowing the product to be sold at very low prices and increasing the sales and demand of the product.

Disadvantages

A disadvantage of a natural monopoly is that there is only one producers and there is no competition between producer's and sellers if there is only one producer for the product

Government Monopoly

Overview

A monopoly that exists because government either owns and runs the business or authorizes only one producer.

Characteristics

The government authorizes or regulates the monopoly and there is usually on producer that the government chooses or it is the government itself

Advantages

The government provide goods and services that either could not provided by private firms or that are not attractive to them because of insufficient profit opportunities

Disadvantages

The government is getting involved in the market and then begins to regulate price not allowing to change which may lower the demand of the product

Geographic Monopoly

Overview

A geographic monopoly is monopoly that exists when there are no other producers or sellers of a certain product within a certain region

Characteristics

The monopoly is only in a specific region. Another characteristic is that the prices can change based on who own's the product in the region.

Advantages

Since the product is only in one particular region it can attract more buyers to that region to purchase the product since the consumers cannot find the product in their own region

Disadvantages

The market for the product is restricted to a certain region. This could mean that it does not allow many substitutes to be found if there are none in that region

Technological Monopoly

A camera company can have patent's on what they create

Overview

A monopoly that exists because the firm controls a manufacturing method, an invention, or a type of technology.

Characteristics

Technological monopolies occur when the good or service the company provides has legal protection in the form of a patent or copyright.

Advantages

The method can allow more trust's and mergers to be formed since the company owns the product which can allow for more collaborations

Disadvantages

A copyright means that the company that owns the product is the only one that can produce it a certain way not allowing for many standardized product which makes it more like a monopolistic competition

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2 years ago
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Great website, love the background, love the examples, and love the visual aids. The text is a bit thin but the summaries provide all the information that is really necessary, great job.

2 years ago
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Aside from repeating what everyone else said, the information seems very textbook where things are highly organized, but it is hard to connect to.

2 years ago
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-Caleb Dobias

2 years ago
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You chose an interesting array of visuals. Also, as the website continued to the bottom, your information started getting shorter and shorter. Also, great job on the choice of hyperlinks.
-Brandon Perez

2 years ago
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You did a great job on doing the overviews for each section. Very clear and quick to the point. You also did an amazing job on the visuals.

2 years ago
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Your background is perfect XD!

2 years ago
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The many visuals and especially the background help to make the information clearer.

2 years ago
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Good job. I feel Benjamin Franklin is a truly great role model on how to conduct ones life.

2 years ago
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Best one I've seen thus far. Only thing that would've been preferable would be if the buttons were incorporated into the text a little more