Types of Market Structures

Types of Market Structures

Perfect Competition Market

Perfect Competition Market is where there are huge number of buyers and sellers. All the sellers bring homogeneous products into the market. Here the price of the commodities remains more or less stable and no other single seller would be able to influence a price hike.

Example: Every day in our life we see local farmers market. So there most of the farmers sells same types of fruits, vegetables, herbs. We can easily compare the price of the goods, but they are of almost same price.

Monopolistic Competition Market

Monopolistic Competition Market is a type of market structure where the firms has many competitors, but each one sells slightly different product.

Example: Let’s take an example of restaurant business. Now a day there are several restaurants and hotels. Here there are differentiation and varieties of product is possible. Each firm can control its price-output policy to some extent. Here the number of films are not as large as perfect competition.

Oligopoly Market

Oligopoly Market is a type of market where firm can sell either identical or similar product. Here the entry of the firm is restricted. They can therefore influence price and affect the competition.

Example:

·         Smartphones company - Apple and Samsung

·         Mobile networks like Airtel, Vodafone, Idea, Reliance Jio, BSNL

·         Auto Industries.

Like these firms sell identical or similar products. And therefore there is influence in price which affects the competition.

Monopoly Market

Monopoly Market is a market that is dominated by one seller and no substitute products. Here the entry of the other firms is restricted or completely blocked.

Examples:

• Indian Railways
• State Electricity Metro
• State Electricity Board
• Local Water Company

Like they are only the provider of their own products and services and they have only one firm.