MARKET TYPES

MARKET TYPES

1. Monopsony market

   • Monopsony is a market structure in which there is only one buyer or buyer. While there may be one or several bidders. Therefore the market is considered to be in imperfect competition.
     • Example of monopsony
       • A clear example of monopsony is public works or the heavy weapons industry, where there is a normal situation of competition between suppliers (construction companies or tank manufacturers), but there is only one consumer (the State). Also public services or goods, such as firefighters' suits, for example, there is only one demander of firefighters' suits.

2. Perfect competition market

   • Perfect competition in a market means that none of the agents can influence the price of the good or service, i.e., both sellers and buyers are price takers.
     • Features
       • Free concurrence Firms in perfect competition are "price-accepting". That is, there are a large number of companies and none has the ability to influence price, resulting in an idyllic situation in which the welfare of all participants is maximized.
         • Homogeneous product Perfect competition requires a homogeneous product that cannot be differentiated among competitors.
           • Perfect information For a homogeneous product to exist, it is vital that the information on prices and products be perfect. In other words, data must be transparent and clear.
             • Absence of entry or exit barriers The absence of entry barriers or exit barriers in an environment of perfect competition should be practically nil. In other words, anyone can enter the business if they wish, or leave it, without a large deployment of resources.

3. Pure monopoly market

   • A monopolistic market is one controlled by a single company. Only this company (monopoly) offers a certain product for which there are no close substitutes. close substitutes. Whereas in a perfectly competitive market the participants (buyers and sellers) are "price takers", a monopoly can fix the price of a product. (buyers and sellers) are "price takers", the monopolist can set the price.
     • example
       • example Gas service companies: companies that are unique in their country and offer the product through a single medium, which cannot be substituted by any other. Oil companies: countries with oil generally establish state-run companies to control the production of oil and its derivatives. Electric power companies: as in the previous cases, a single company is in charge of supplying electric power to the

4. Imperfect competition market

   • Imperfect competition is a situation in which individual sellers have the ability to significantly affect the market price of their products or services.
     • Types of competition
       • There are several types of imperfect competition. The The most extreme case is that of monopoly, a market structure in a market structure in which there is a single single bidder who has total control of the market. market. Monopolies are not common in practice. practice, those that do exist are usually due to regulations or state protection

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