Market Structures and Market Power

Market power

There are several forms of market structures extending from a monopoly where there is a single seller of a commodity to perfect competition where there are many sellers each of whom has an insignificant share of the total market.

Between the two extremes of monopoly and perfect competition there exists many different types of market structures to which the term imperfect competition is applied.

There may be imperfect competition which is very close to monopoly, or a form of imperfect competition close to perfect competition.

Market structures

Duopoly means that the market consists of two sellers.

Oligopoly means that there are few sellers.

Market Structures

Perfect CompetitionMonopolistic CompetitionOligopolyMonopoly
Number of FirmsManyManyFewOne
Types of ProductHomogenousDifferentiatedHomogenous/Differentiated
Forms of Competition between Producers————-Non – price CompetitionPrice/non-price Competition
Availability of InformationPerfect InformationImperfect knowledgeImperfect knowledgeImperfect knowledge
Barriers to entryFree entryFree EntryEntry restrictedEntry restricted
Control over PricePrice TakerPrice searcherPrice searcherPrice searcher
Market structures

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