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Business
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| Number of pages / Number of words: |
25 / 6759 |
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Different industries, such as apparel, food and consumer goods, automotive, service industries and many else, have different structures, and these structures affect the decisions the prudent manager will make.
Because every market has unique element, economics introduce the four basic models to distinguish among various types of market structures; those are:
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Perfect competition
2. Monopolistic competition
3. Oligopoly
4. Monopoly
Those four basic market structures have differences in terms of characteristics and they are described in the following charts.
Table I. Comparison among Four Models of Market Structures
|Market Structure |Number of Firms |Nature of Products |Entry and Exit |
|Perfect competition |Large number: each relatively |Products are identical or close |Easy |
| |small |substitutes | |
|Monopolistic competition |Large number: each relatively |Products are somewhat different |Easy |
| |small | | |
|Oligopoly |Small number: each relatively |Products are either identical or |Restricted |
| |large |different | |
|Monopoly |Single seller |Products with no close substitute|Restricted |
Perfect Competition
In markets characterized by perfect competition, there are many firms, each of which is small relative to the entire market...
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