Economic Models of competition among businesses in the same industry
Monopolistic Competition - Oligopoly - Monopoly
Example of Monopolistic Competition: Burger King and McDonald's burgers and fries.
Monopolistic Competition occurs when many sellers offer similar, but not standardized, products. Along with competition this concept needs Product Differentiation; Effort to distinguish a product from similar products
Example of Oligopoly:The computer market from Microsoft, Linux and Apple
Oligopoly is a market structure in which only a few sellers offer a similar product. Along with this concept there comes Market Share and Start-up costs; Market share is a company's percent of total sales in a market, Start-up costs are the expenses that a new business face when it enters a market. Start-up costs for a new company in a oligopolistic market can be extremely high
Example of Monopoly: Internet providers are a big geographical monopolistic market. Comcast, Time Warner Cable are both region locked and some people's only hope for internet and cable television
A Monopoly is a exclusive possession or control of the supply or trade in a commodity or service. Characteristic of a Monopoly include a Unique Seller, Control for Prices, and a Restricted Market.
There are four different types of Monopoly's; Natural, Government, Technological, and Geographic. Natural Mon. occur when the costs of production are lowest with only one producer. Government Mon exist when the government either owns and runs the business or authorizes only one producer. Tech Monopoly occurs when a firm controls a manufacturing method, invention, or type of technology. And Geographic Monopoly exist when there are no other producers within a certain region.
the Good and the Bad
Monopoly - No competition and avoids duplication, but comes with a lower level of service and the consumers have to pay more with little to no consumer sovereignty
Oligopoly - Large firms have a strong hold in a market and high profits, but firms cannot take independent decisions and with little to no creative ideas or changes can be taken
Monopolistic Competition - High service quality and little to no cost for entry, but higher prices and it can be allocatively Inefficient compared to perfect competition.
Market Structure Comparison