Market Structures

Market Structures

1. Oligopoly

   • Characteristics
     • Few suppliers
     • Concentration ratio e.g. 3 companies have 75% of the chocolate market
     • High barriers of entry
     • Inter-dependance which could lead to cozy competition but potential for price wars
     • Non price competition
     • Formal conclusion is illegal
   • Example: Supermarkets
     • Strongly branded
     • High start up costs
     • 5/6 main ones
     • 80% of the market
     • Evidence they are very price competitive?
       • Charity work?
   • More examples: petrol, banking, cars, airplanes (bowing and airbus)

2. Monopoly

   • Characteristics
     • High prices
     • Very high barriers of entry
     • Single supplier
     • High market share
     • Slack (bad service)
   • Example: Hawkins (school uniform)

3. Monopolistic Competition

   • Same as perfect competition
     • Differentiated products
   • Example: Hairdressers

4. Competitive (perfect competition)

   • Characteristics
     • Low barriers to entry
     • Low prices
     • Many suppliers
     • Price competition
     • Homogenous products
   • Example: Taxi driver