Compettion market

Compettion market

1. perfect competition

   • What is called perfect competition is a commercial market where no company has the power to determine the price of the products, since no supplier or demander can, individually, determine the value of a good or service.

2. imperfect competition.

   • We find this assumption in practically all real markets, and it is characterized by the fact that economic agents do have the possibility of exerting pressure on the price of products and services. Depending on the markets and the type of product or service that is offered in them, in practice we can also differentiate between different types of imperfect competition.
     • Types of imperfect competition
       • Oligopsony: Presents a market characterized by few applicants, although the number of suppliers may be high. As there are few buyers, they are the ones who have control over prices, and the products and services offered in this type of market are usually homogeneous. A good example can be found in companies that manufacture airplanes, ships (for passenger transport) or submarines.
       • Monopsony: The situation is quite similar to that of oligopsony, with the big difference that, in this case, there is a single claimant, who has complete control over the price and the conditions of purchase and sale. The most obvious example can be found in the military arms industry, where the only consumer is the State.
       • Monopolistic competition: In it there are many producers offering products and services in the market, and none of them has the capacity or power to control and dominate over the rest. There is freedom of entry and exit for these companies, which offer differentiated products and services in different aspects.
       • Monopoly: In the monopoly there is only one supplier, who exclusively provides the products and/or services in question, having a total degree of control over prices and conditions. This company totally dominates the supply market, and there are no possible substitutes for citizens who wish to purchase its product or service. An example may be the companies that supply electricity for a country.
       • Oligopoly: There are very few bidding companies, and they have enough power to influence market conditions and prices. Its power is not as high as in a monopoly, since there is some competition between the participating companies. Here, the product can be differentiated (vehicle factories) or undifferentiated (gasoline).