Market Structures_-Perfect Competition, Monopoly, Monopolistic Competition 7 Oligopoly.pptx

Characteristics of Market Structure

1. B.Tech. [First-year] Basic Economics

2. Types of markets Perfect competition Monopoly Monopolistic competition Oligopoly

3. WHAT IS A MARKET?

4. meaning and characteristics of perfect competition Perfect competition describes a market structure where competition is at its greatest possible level. Perfect competition describes a market structure where competition is at its greatest possible level. To make it more clear, a market which exhibits the following characteristics in its structure is said to show perfect competition:

5. Meaning and characteristics of monopoly A market structure characterized by a single seller, selling a unique product in the market. In a monopoly market, the seller faces no competition, as he is the sole seller of goods with no close substitute. In a monopoly market, factors like government license, ownership of resources, copyright and patent and high starting cost make an entity a single seller of goods. All these factors restrict the entry of other sellers in the market. The characteristics are explained below:

6. meaning and characteristics of monopolistic competition In monopolistic competition, the market has characteristics of both perfect competition and monopoly. A monopolistic competition is more common than pure competition or pure monopoly.  Firms offer products or services that are similar but not perfect substitutes. Barriers to entry and exit in a monopolistic competitive industry are low, and the decisions of any one firm do not directly affect those of its competitors.

7. meaning and characteristics of OLIGOPOLY Oligopoly is defined as a market structure with a small number of firms, none of which can keep the others from having significant influence. Here the industry is dominated by a few firms. Also, as there are few sellers in the market, every seller influences the behavior of the other firms and other firms influence it. An Oligopoly market situation is also called ‘competition among the few’. Characteristics of oligopoly are explained below:

8. Form of Market Structu r e Number of Firms Nature of Product Price Elasticity of Demand for an Individual Firm Degree of Control over Price Perfect Co m pe t i t ion Large n umber of firms Homogeneous Infinite None Monopoly One Unique product without close substitute Very small Considerable Monopolistic Competition Large number of firms Product di f ferent i a t ion by each firm Large Some Pure Oligopoly Few Firms Ho m ogen e ous product Small Some Di f ferent i a t ed Oligopoly Few Firms Di f ferent i a t ed Product Small Some Market Structure : In a nutshell

9. examples

10. Interesting videos: Monopoly vs. Oligopoly vs. Competition: Monopolies and Oligopolies Defined, Explained and Compared https://www.youtube.com/watch?v=0Gb4t1L2MH0 Barriers to Entry Explained in One Minute: Definition, Examples and Monopoly/Competition Concerns https://www.youtube.com/watch?v=Jx8fEumsbQo Why do competitors open their stores next to one another? https://www.youtube.com/watch?v=jILgxeNBK_8 The Importance of Competition