The number and relative size of firms producing a good vary across industries.
Types of Market
Classification Of Market Structure Based On The
Nature Of Competitor:
1. Perfect
market
2. Imperfect
market
The
imperfect market in turn can be classified as
a. Monopoly
market
b. Duopoly
market
c. Oligopoly
market
d. Monopolistic
market/ competition
The number and relative size of
firms producing a good vary across industries. Market structures range from
perfect competition to monopoly. Most real-world firms are along the continuum
of imperfect competition. Market structure affects market outcomes, ie., the
price and quantity of goods supplied.
The above chart tells us that
there are four types of imperfect competition existing in the present market
environment. It is classified based on the number of buyers, sellers and
competitors in the market. This chapter explains the price determination and
profit maximization methods followed in these markets. Let us understand the
meaning of each competition. Monopoly
market: a market with only one seller and
a large number of buyers. Monopolistic
competition: a market in which firms can enter
freely, each producing its own brand
or version of a differentiated product. Oligopoly
market: market in which only a few firms
compete with one another and entry
by new firms is impeded/restricted. Duopoly: market in which two firms compete with each other. Monopsony: is a market with only one buyer, and a few/large
sellers.
Tags : Managerial Economics - Market Structure
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