In market economies, there is a mixture of several market structures that stand, relying on the industry and the businesses within that industry.
Minor company holders want to realize what type of market structure they are operating in when making pricing and production decisions, or when selecting whether to join or leave a certain business.
Keywords
The four primary market structure types are Perfect Competition, Monopoly, Oligopoly, Monopolistic Competition and Monopsony.
Perfect Competition with Infinite Buyers and Sellers
Perfect competition is a market method illustrated by numerous many buyers and sellers. In the traditional academic explanation of perfect competition, there is an unlimited number of buyers and sellers.
With so many market players, no one participant can modify the prevailing price in the market. If they try to do so, buyers and sellers have infinite opportunities to seek.
An example of this case is a supermarket and retail sale.
Monopoly with One Producer
A monopoly is the perfect different form of a market system as perfect competition. In a pure monopoly, there is only one producer of a particular good or service, and normally no acceptable option.
In such a market policy, the monopolist can charge whatever price they desire due to the shortage of competition, but their overall revenue will be restricted by the capacity or willingness of buyers to pay their price.
The best example, in this case, the Microsoft application.
Oligopoly with a Handful of Producers
An oligopoly is similar in many ways to a monopoly. The primary difference is that rather than having only one producer of a good or service, there are a handful of producers, or at slight a handful of producers that make up a powerful majority of the production in the market structure.
While oligopolists do not have the same pricing strength as monopolists, it is possible, without engaged government law, that oligopolists will debate with one another to set prices similarly as a monopolist would.
An example of this case is the telecommunications industry.
Monopolistic Competition with Numerous Competitors
Monopolistic competition is a type of market structure incorporating aspects of a monopoly and perfect competition. Like a perfectly competitive market policy, there are many competitors in the market.
The difference is that each competitor is nicely differentiated from the others that some can charge bigger prices than a perfectly competitive company.
An illustration of this case is a restaurant.