Types of Market Structure

Types of Market Structure

1. SUBJECT : MANAGERIAL ECONOMICS TOPIC : TYPES OF MARKET STRUCTURE

2. Definition of Market The term “Market “ refers to a particular place where goods are purchased and sold. According to Prof. R. Chapman, "The term market refers not necessarily to a place but always to a commodity and the buyers and sellers who are in direct competition with one another”. BUYERS SELLERS MARKET

3. What is the market structure? Perfect competition Oligopoly Monopoly Monopolistic competition The firm in competitive markets Imperfect competition

4. Perfect competition No barriers to entry (legal, technological, or resource) No investment lag - Immediate implementation of production decisions) Homogeneous goals of the owners and managerial staff Profit maximiser Identical product Price-taker Produces a homogeneous product Perfect information

5. According to D.Salvatore, “Monopoly is the form of market organization in which there is a single firm selling a commodity for which there are no close substitutes.” Single Producer and large number of Buyers. Barriers to Entry Full Control over Price Price Discrimination Monopoly

6. According to J.S.Bains, “Monopolistic competition is market structure where there is a long number of small sellers, selling differentiated but close substitute products. ” Large number of Sellers. Product differentiation. Freedom from Entry or Exit. Independent behaviour. Monopolistic competition

7. О ligopoly According to Mansfield, “Oligopoly is a market structure characterised by a small number of firms and a great deal of interdependence.” Few Sellers. Each firm carefully watches decisions of competitors and often plans anti-strategies. Importance of Advertising and Selling Costs. Interdependence.

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