Market Types According to Competition

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

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Market Types According to Competition

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	Created by Liliana Cristancho about 4 years ago