3. Perfect Competition
It presents an ideal market condition for the customers and
suppliers.”
There are a lot of customers and suppliers in specific market, but
they only show a very little or no impact on the prices of items.”
• The buyers have definitely no market power to influence the market price
because in perfect competition, buyers usually purchase only small amounts
of items.
• It is difficult for buyers to ask for discounts and credit terms to sellers.
• Highly similar products or homogenous products are sold by the
sellers in perfect competition.
• “Consumers are indifferent or they don’t have preference whether to buy
from one supplier or switch to another one (because all sellers sell exactly
the same or standardized products)”.
4.
5. Monopoly
Monopoly is from the Greek term”, meaning
“one seller”.
The two extreme market structures are
perfect or pure competition and pure
monopoly.
“From this concept, we can infer that
monopoly is an exact opposite of perfectly
competitive market structure”.
6. Monopoly
“Monopoly exists when a single or one seller
has control of entire supply of raw
materials”.
• Only one seller offers a particular item in the
market.
• There is no close substitute or no alternative
store or firm for the monopolist.
7.
8. Monopolistic Competition
Another market structure is monopolistic competition
which has the qualities of both the perfect competition
and monopoly.
• Many firms exist in the market under monopolistic
competition.
• This is the characteristic of perfect competition that is
the same in monopolistic competition.
• Many firms offer similar items in the market but may
have different brands.
9. Firms sell heterogenous or differentiated products.
• o This means that the products they sell have similar basic
functions and can satisfy the basic need of the customers
however, there are variations in these products which make
them unidentical.
10. Oligopoly
An oligopoly is a type of imperfect competition for its industry is
composed of few companies that interact with each other.
• “Few sellers account for most of or total production since barriers
to entry levels up the difficulty for new players to enter the
market.”
• “Oligopolists collude with each other to raise prices which
sometimes affect the final consumers due to possible existence of
poor service or goods.”
11.
12.
13. Now that you know something about each market,
I have an exercise for you class: let’s see if you can
come up with real-world examples for each
type/classifications of market structure.
