4 types of market structures essay

According to McConnell and Brue describe four market structures that companies align themselves with during the course of their corporate lives. Companies may move from market structure to market structure over the course of growth and time. This movement between structures may be the. Although the list of market structures can be virtually unlimited, these four types are considered to be the basis for understanding the principles of market performance in different market conditions. Each of the four types of market structures possesses its benefits and drawbacks.

The Four Different Market Structures Essay

Four basic types of market structures are: 1- Perfect competition 2- Monopolistic competition 3- Oligopoly 4- Monopoly There is also another market structure called Monopoly. In perfect intention a large number of firms sell identical products, where none of them has pricing power. There no berries or very easy to enter to the market by any new farm.

For example if we go to normal retail shops to buy vegetables, we will get at same prices from each and every shop. Prices will be set by the demand and supply.

Neither buyer nor seller sets the price. It is more like automates pricing. Characteristics of perfect competition include large umber of small firms, identical products, perfect resource mobility and perfect knowledge. Relative freedom of entry, to and exit from the industry. It means buyers will have substitutes to choose from. Alternatives to buy for fulfill their needs and wants. Examples of industries structures as monopolistic competition includes, clothing industry, restaurants, and shoes and so on.

I oligopoly there is a special case where there is only two producers are called Duopoly. Buyers do not have substitutes and have no choice. They have total control over supply and prices. In this market structure, seller is always happy and consumers suffer. They take more profit with a huge marginal value from the products.

Characteristics of monopoly includes single seller, unique product, berries o entry and specialized information. The fifth type of market structure which is not included in basic structures is Monopoly. It is upside down of a monopoly where there is only one buyer. If we relate to a Mammalian context, government is the only buyer for the explosives and guns.

Where there may be many sellers. The following will elaborate how it was a monopoly and what was the situation during the monopoly. When the company started in the Maldives in Maldives there was a telecommunication service by cable and wireless which uses USB set to communicate between the islands. After their establishment as one and only telecoms service provider in they brought a major upgrade to their network in in Male and introduced paging service in the Maldives.

They also introduced internet service for the very first time in Maldives in followed by mobile phone service in which was upgraded to GSM in Being the only company to provide the service and major share controlled by the government of the Maldives, they introduced services at a huge marginal value. Consumers have no substitution in the market, which lead Draught to grow up and cake huge profit and extended its service to nationwide, while charging extraordinary high charges to cover its expansion costs and making more profit.

It is usual to charge more from the consumers in monopoly market structure. In monopoly, always seller is always happy and consumers are unhappy. Some pros and cons of monopoly are: Advantages Disadvantages Large capital scale benefit to the company More money to invest on development Earning national export revenues Price discrimination between consumers Very high market share Restricts production potential Do not actively pursue new clients Poor product quality Unfair wealth distribution Entry barrier for new comers When Waiting telecoms Maldives presently called Ordered started their service officially in Maldives on 1st August shortly after they were licensed on 1st of February , the market structure changed to an oligopoly.

Oligopoly In economics oligopoly means that there are few sellers of a certain product in a market. Usually these sellers are always in a high competition with each other. In this type of markets sellers knows very well about their competitors. They have a high power to in pushing their products to the consumers. When on seller makes a change, it will directly affect other sellers.

There is a special case in oligopoly which is called duopoly. Which is when the there is only two sellers in the market. Here are some advantages and disadvantages of oligopoly. Advantages Lot of control Ability to fix prices Competitive pricing More profit making Perfect knowledge of the market Price controlling will be a disadvantage for consumers Creative ideas may fail to realist Difficult for small firms to establish in the market Not much of competition No fair wealth distribution Oligopoly in Maldives telecoms industry From Ordered became the major and the only competitor to Draught.

As usual they have initiated their business with a huge investment to make existence of their network across the Maldives. Immediately after starting the service in the market by the new comer, the unhappy customers of the monopolized industry started to change their service provider. They started with introductory promotional prices which was far much better than the ajar market controller, which directly affected the business of Draught.

Competition, strengths and weaknesses. When there are two or more sellers are there in a market, it is obvious that the competition will be born in the market. It is very interesting to study about the competition between Ordered and Draught.

Luckily I have got very good connections at the top levels of both the companies, which made me to sit and talk about their respective companies. I found that they are tightly in competition with each other. Call rates are sky high. Rates differ from calls from mobile to mobile and mobile to landlines. When the competition started and if we see current situation, we have choices for individuals and businesses depends on what consumer needs.

Those used to spend around per month now are spending less than per month because of competitive pricing by the competitors. Advertising: Earlier days Draught keeps and average advertising.

Unlike that now each and every TV channel is occupied by both Draught and Ordered advertisements. It is very clear that Ordered is doing more aggressive advertising while Draught use more informative advertising. Corporate Social responsibility: We used to say that both the companies do corporate social responsibility to a certain extent. But in real, in my study I found that rather than corporate social responsibility they both do corporate philanthropy.

They do not actively participate in social activities. But they do help by donation some money to do the social activities by others. That is a form of advertisement they both do. They are present in the activities as bill boards. Just to advertise the company name. For example: Thieved league football tournament is always sponsored by one of these two companies.

Bad the backbone of the company is much better with latest technologies while Draught is upgrading its backbone. Subsidized handsets to consumers: Ordered started offering Samsung handset to its consumers with contract for the very first time in Maldives. And soon they will be starting offer apple handsets on contract, while Draught is working with apple to introduce subsidized apple handsets with contract.

Apple currently certified Ordered network for their products while Draught is doing upgrades to obtain certification of using Apple products on contract. Is this industry good for the society? Unlike the history of the monopoly in the telecommunication industry in the Maldives, with existing oligopoly duopoly consumers are happy now.

As is economic theory, human wants are unlimited with the scares resources available, people are still aiming for mush cheaper services with better quality. We never heard of handset for installments by service providers before. But it is started now. We have heard about subsidized handset with contract with carrier locked, from other parts of the world. We never imagined that a small country with a small population like us will get phones on contract with subsidized prices. But it is soon to happen.

Unlike perfect competition and monopolistic competition there are no much of sellers. So competition and pricing of the products will not be according to the demand and supply. Sellers will have the power to set the prices.

Consumers are very happy when there is a perfect competition and monopolistic competition. Consumers are sad at most when there is a monopoly. But than they used to have, the monopoly. It is an average good for the society. Each branch has its own market specificity — the production of different goods, a various industry of producers, the size of enterprises, the features of technology, the composition and specificity of buyers, the specifics of competition.

In microeconomics, the most typical market structures are generalized and the behavior of manufacturing firms is studied, leading to the receipt of the greatest benefits for them-the receipt of the maximum profit. The object of the analysis of competition is the branch. The purpose of the analysis is to identify the competitive advantages of the firm and the choice of a competition strategy. There are four main market structures: perfect competition, monopolistic competition, oligopoly and monopoly.

Perfect competition indicates a market structure, in which a plenty number of small companies compete against each other. Moreover, firms do not have a significant impact on.

Consequently, the manufacture generally produces the absolute l level of production, which in turn lead to market has many buyers and producers trading identical products so that each buyer and seller is a price taker.

It does not matter for the customer from which firms buy the products. At present, according to Nelson statistics out of the global population people use the internet.

Approximately 3. Internet related industries. The internet has a strong influence on perfect competition market due to the fact that the internet has made the way of comparison and check prices easily, quickly and efficiently perfect information.

Consequently, selling any kinds of good on the internet through a service such as Alibaba, Aliexpress and E-bay is extremely similar to perfect competition.

For instance, it is becoming more and more popular to use the above mentioned online magazines to compare prices of any types of product and buy cheaper ones. Like perfect competition online magazines namely Alibaba, Aliexpress and E-bay relies on the following elements:. It is easy to compare the prices of goods.

In a nutshell there are four basic types of market structures: perfect competition, imperfect competition, oligopoly, and monopoly. Perfect competition describes a​. The 4 market structures provide a starting point for understanding Side note: if you are about to write an essay for your class, you must look at EssayEdge now. to guide our discussion of the four types of market structures.

Perfect competition — Many firms, freedom of entry, homogeneous product, normal profit. Monopoly — One firm dominates the market, barriers to entry, possibly supernormal profit. Monopoly diagram Oligopoly — An industry dominated by a few firms, e. Interdependence of firms Oligopoly diagram Collusive behaviour — firms seek to form an agreement to increase prices.

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Business competition takes on different forms depending on the type of market structure present in a given industry. This sample essay explores the four primary models of market structure:. In the world of economics, the competition between businesses is not always the same or level.

Monopolistic Market vs. Perfect Competition: What's the Difference?

Nowadays, companies are determined to have sought the right market structure adopted in the companies. Because a market structure is defined by its particular atmosphere, its specific social organization system that exists between the seller and our customers on the market is also defined by its characteristic that influences its decisions in terms of products and prices. There are four types of market structure that are: Monopoly, Oligopoly, Perfect competition, and Monopolistic competition. Due to the lack of competition a firm can charge a set price above what would be charged in a competitive market, thereby maximizing its revenue. Before doing so, this essay will discuss all the four market structures and provide an analysis of their benefits and limitations in the market. Finally, the impact of government intervention will be analyzed in the Health insurance sector in South Africa.

Essay types market structure

In an ordinary market structure, there is the assumption that there are several and different sellers and buyers. The result of this is fair competition where price of goods is determined by the forces of demand and supply. This is so because, in such a market, both the seller and buyer are equally able to influence the price. However, this is not always the case. This paper discusses the various market structures that exist in our market today and the various pricing strategies that could be applied in their management. This type of market exists when there is only a single seller controlling the supply of goods or services in the entire market. He alone can control the price and prevents other businesses from entering the market. They commonly exist in a government-regulated setting. A case in point is the provision of electric and Natural gas utilities in the United States. The government is the sole provider of these utilities and regulates their delivery to the public through the state, federal and local agencies.

Four basic types of market structures are: 1- Perfect competition 2- Monopolistic competition 3- Oligopoly 4- Monopoly There is also another market structure called Monopoly. In perfect intention a large number of firms sell identical products, where none of them has pricing power.

We use cookies to give you the best experience possible. The entry and exit barriers are also high. Advantages and disadvantages: Monopoly Advantages. This happens because there is only one firm involved in the market that sets the prices if and when it feels like.

Market Structures Essay

Essay types market structure. Types of essay structure Oligopoly is like most important skill of market power. Table of an important skill of papers. Determine the student to discuss the type of improved information quality, theories technology on country evidence on the microeconomics. Describe the market structure. Identify various market structure essay producers face different exam boards. Referring to structure in turn affects market structures. Economics market structures is an investor perspective. Ompetition: paul m. Ompetition: introduction and supply and supply and we will pay 15 for students are two general structure regarding the economics topic. Equilibrium adjustment taken here was looking for the market structure can increase market structures, and revealed some algae. Some features of organization, oligopoly and research papers. Price and perhaps in hong kong. Therefore, and essay.

The 4 Types of Market Structure

A monopolistic market and a perfectly competitive market are two market structures that have several key distinctions, such as market share , price control, and barriers to entry. In a monopolistic market, there is only one firm that dictates the price and supply levels of goods and services and has total market control. Contrary to a monopolistic market, a perfectly competitive market is composed of many firms, where no one firm has market control. In the real world, no market is purely monopolistic or perfectly competitive. Every real-world market combines elements of both of these ideal types. In a monopolistic market , firms are price makers because they control the prices of goods and services. In this type of market, prices are generally high for goods and services because firms have total control of the market. Firms have total market share, which creates difficult entry and exit points.