GROUP ONLINE POSTER
Market Structure
MADE BY ORNELLA VINTIMILLA AND DANIEL DIAZ GRANADOS :) PERIOD #1
MONOPOLY
A monopoly refers to a market structure where a single firm controls the entire market. In this scenario, the firm has the highest level of market power, as consumers do not have any alternatives. As a result, monopolies often reduce output to increase prices and earn more profit.
Structures of monopoly
Variety of goods
Barriers to entry
Control Over Prices
Number of Firms
Barriers to enter the market are extremely high.
Nearly impossible to become a monopoly.
Very few monopolies exist.
Monopoly have no variety of goods.
Monopoly have one number of firms.
Monopoly have a complete control over prices.
Examples of Monopoly
2. Microsoft is a Computer and software manufacturing Company. It holds more than 75% market share and is the market leader and virtual monopolist in the tech space.
- Public services like the railways are provided by the government. Hence, they are a monopolist in the sense that new partners or privately held Companies are not allowed to run railways. However, the price of the tickets is reasonable so that public transport can be used by the majority of people.
OLIGOPOLY
An oligopoly describes a market structure that is dominated by only a small number of firms. That results in a state of limited competition. The firms can either compete against each other or collaborate by doing so, they can use their collective market power to drive up prices and earn more profit.
StructureS Of oligolopy
Control over price
Variety of goods
Number of Firms
Barriers to entry
Oligolopy has a high barrier to entry. It is difficult to get into the "group".
Oligolopy has some control over prices. Price is significantly controlled by firms.
Oligopoly has some variety of goods. Selling similar products (more similar or more different).
Oligopoly has a few number of firms.3-5 firms controlling at least 70% of the market.
Examples of Oligopoly
2. National mass media and news outlets are a prime example of an oligopoly, with 90% of U.S. media outlets owned by six corporations: Walt Disney (DIS), Time Warner (TWX), ViacomCBS, NBC Universal, and News Corporation (NWSA).National mass media and news outlets are a prime example of an oligopoly, with 90% of U.S. media outlets owned by six corporations: Walt Disney (DIS), Time Warner (TWX), ViacomCBS, NBC Universal, and News Corporation (NWSA).
- Operating systems for smartphones and computers provide excellent examples of oligopolies. Apple iOS and Google Android dominate smartphone operating systems, while computer operating systems are overshadowed by Apple and Windows.
MONOPOLISTIC COMPETITION
Monopolistic competition also refers to a market structure, where a large number of small firms compete against each other. However, unlike in perfect competition, the firms in monopolistic competition sell similar but slightly differentiated products. That gives them a certain degree of market power, which allows them to charge higher prices within a specific range.
STRUCTUREs of Monopolistic Competition
Variety of Goods
Barrier to Entry
Control over Price
Numbers of Firms
Monopolistic Competition have many numbers of firms. Firms act independently and no single firm is large enough to change the market alone.
Monopolistic Competition have a low barrier to entry. Fairly easy to enter and exit the market.
Monopolistic Competition have some variety of goods.Each seller is trying to make its product standout.
Monopolistic Competition have a little price over control. No one seller has enough power to change price. Buyers are well informed about the differences in products.
Examples of Monopolistic Competition
- The Fast Food companies like the McDonald and Burger King who sells the burger in the market are the most common type of example of monopolistic competition. The two companies mentioned above sell an almost similar type of products but are not the substitute of each other. Now which product the particular consumer likes the most and of which company totally depends on him. Apart from the burger, other products are also sold by these companies like French fries soft drinks, etc. All these products of the mentioned companies are of similar nature but there is no congruency between the products sold by the two as each one has a slightly different shape and taste. This is the monopolistic structure.
2. There are certainly a lot of bakeries in any town and each one of them sells a slightly differentiated product to the consumer in the market. But if in a particular area of the town there exists only one bakery, then it can demand a slightly higher amount of price for its products. The firms under monopolistic competition with their ability can gain a greater degree of market share due to which it can increase the prices of its products.
PERFECT COMPETITION
Perfect competition describes a market structure, where a large number of small firms compete against each other. In this scenario, a single firm does not have any significant market power. As a result, the industry as a whole produces the socially optimal level of output, because none of the firms can influence market prices.
Examples of perfect competition
Variety of Goods
Barrier to entry
Control Over Prices
Number of Firms
Perfect Competition have no variety of goods. Every "market" sells the same.
Perfect Competition have no control over prices. Too many producers and consumers. No one seller controls price.
Perfect Competition have no barrier to entry. Very few barriers to keeping new sellers out - very easy to enter and exit the market.
Perfect Competition have many numbers of firms.
Examples of Perfect Competition
- In some cases, there are several farmers selling identical products to the market, and many buyers. At the market, it is easy to compare prices. Therefore, agricultural markets often get close to perfect competition.
2. The internet has made many markets closer to perfect competition because the internet has made it very easy to compare prices, quickly and efficiently (perfect information). Also, the internet has made barriers to entry lower. For example, selling a popular good on the internet through a service like e-bay is close to perfect competition. It is easy to compare the prices of books and buy from the cheapest. The internet has enabled the price of many books to fall in price so that firms selling books on the internet are only making normal profits.
THANK YOU !
SOURCES: https://quickonomics.com/market-structures/ 14 Market Structure Notes
MARKET STRUCTURE
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Transcript
GROUP ONLINE POSTER
Market Structure
MADE BY ORNELLA VINTIMILLA AND DANIEL DIAZ GRANADOS :) PERIOD #1
MONOPOLY
A monopoly refers to a market structure where a single firm controls the entire market. In this scenario, the firm has the highest level of market power, as consumers do not have any alternatives. As a result, monopolies often reduce output to increase prices and earn more profit.
Structures of monopoly
Variety of goods
Barriers to entry
Control Over Prices
Number of Firms
Barriers to enter the market are extremely high. Nearly impossible to become a monopoly. Very few monopolies exist.
Monopoly have no variety of goods.
Monopoly have one number of firms.
Monopoly have a complete control over prices.
Examples of Monopoly
2. Microsoft is a Computer and software manufacturing Company. It holds more than 75% market share and is the market leader and virtual monopolist in the tech space.
OLIGOPOLY
An oligopoly describes a market structure that is dominated by only a small number of firms. That results in a state of limited competition. The firms can either compete against each other or collaborate by doing so, they can use their collective market power to drive up prices and earn more profit.
StructureS Of oligolopy
Control over price
Variety of goods
Number of Firms
Barriers to entry
Oligolopy has a high barrier to entry. It is difficult to get into the "group".
Oligolopy has some control over prices. Price is significantly controlled by firms.
Oligopoly has some variety of goods. Selling similar products (more similar or more different).
Oligopoly has a few number of firms.3-5 firms controlling at least 70% of the market.
Examples of Oligopoly
2. National mass media and news outlets are a prime example of an oligopoly, with 90% of U.S. media outlets owned by six corporations: Walt Disney (DIS), Time Warner (TWX), ViacomCBS, NBC Universal, and News Corporation (NWSA).National mass media and news outlets are a prime example of an oligopoly, with 90% of U.S. media outlets owned by six corporations: Walt Disney (DIS), Time Warner (TWX), ViacomCBS, NBC Universal, and News Corporation (NWSA).
MONOPOLISTIC COMPETITION
Monopolistic competition also refers to a market structure, where a large number of small firms compete against each other. However, unlike in perfect competition, the firms in monopolistic competition sell similar but slightly differentiated products. That gives them a certain degree of market power, which allows them to charge higher prices within a specific range.
STRUCTUREs of Monopolistic Competition
Variety of Goods
Barrier to Entry
Control over Price
Numbers of Firms
Monopolistic Competition have many numbers of firms. Firms act independently and no single firm is large enough to change the market alone.
Monopolistic Competition have a low barrier to entry. Fairly easy to enter and exit the market.
Monopolistic Competition have some variety of goods.Each seller is trying to make its product standout.
Monopolistic Competition have a little price over control. No one seller has enough power to change price. Buyers are well informed about the differences in products.
Examples of Monopolistic Competition
2. There are certainly a lot of bakeries in any town and each one of them sells a slightly differentiated product to the consumer in the market. But if in a particular area of the town there exists only one bakery, then it can demand a slightly higher amount of price for its products. The firms under monopolistic competition with their ability can gain a greater degree of market share due to which it can increase the prices of its products.
PERFECT COMPETITION
Perfect competition describes a market structure, where a large number of small firms compete against each other. In this scenario, a single firm does not have any significant market power. As a result, the industry as a whole produces the socially optimal level of output, because none of the firms can influence market prices.
Examples of perfect competition
Variety of Goods
Barrier to entry
Control Over Prices
Number of Firms
Perfect Competition have no variety of goods. Every "market" sells the same.
Perfect Competition have no control over prices. Too many producers and consumers. No one seller controls price.
Perfect Competition have no barrier to entry. Very few barriers to keeping new sellers out - very easy to enter and exit the market.
Perfect Competition have many numbers of firms.
Examples of Perfect Competition
2. The internet has made many markets closer to perfect competition because the internet has made it very easy to compare prices, quickly and efficiently (perfect information). Also, the internet has made barriers to entry lower. For example, selling a popular good on the internet through a service like e-bay is close to perfect competition. It is easy to compare the prices of books and buy from the cheapest. The internet has enabled the price of many books to fall in price so that firms selling books on the internet are only making normal profits.
THANK YOU !
SOURCES: https://quickonomics.com/market-structures/ 14 Market Structure Notes