Market Types According to Competition

Market Types According to Competition

1. Market structure

   • Perfect Competition
     • Conditions:
       • • Many companies.
       • • The price is defined by the market.
       • • There is no entry or exit barriers.
       • • Homogeneous products, perfect information.
     • Characteristics:
       • • Price - acceptors.
       • • Horizontal demand.
       • • No long-term benefit.
   • Imperfect Competition
     • It is the intermediate market between monopoly and perfect competition.
       • They offer similar (not identical) products, or when there is a high number of buyers, but few sellers (Pérez, A. 2017).
     • Monopoly:
       • • A single company that controls the market.
       • • The demand is that of the market.
       • • Define the price.
       • • Entry barriers.
       • • Single product.
     • Oligopoly:
       • • Few producing companies.
       • • A large number of buyers.
       • • They sell the same product.
       • • Similar prices.
       • • The decisions of one company affect the others.
       • • Strategies: Cooperate or compete.
     • Monopolistic competition:
       • • Many companies.
       • • Similar products.
       • • Brands and advertising.
     • Monopsony:
       • • Market in which consumers have a leading role.
       • • Commercial decisions.
       • • They are capable of changing, or at least influencing, on the price of products (Pérez, A. 2017).
       • • For this to be the case, the demand must be much higher than the supply (Pérez, A. 2017).
       • • Clients have a very high bargaining power in this model (Pérez, A. 2017).

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