Market Structures

Market Structures

1. Monopoly

   • Single producer in market - 1 business has 100% of market share (pure monopoly).
   • Likely to erect barriers - prevent others from entering market.
   • They are price makers - have significant influence on price.
   • Any business with over 25% of market share is classed as a monopoly.

2. Oligopoly

   • Many businesses but only few dominate market.
   • Tend to have differentiated products - with strong brand identity.
   • Brand loyalty encouraged but advertising and promotion.
   • Prices normally stable - short price wars occur.
   • Some entry barriers - high start-up costs etc.

3. Monopolistic Competition

   • Large number of relatively small businesses.
   • Few barriers of entry.
   • Products are similar - different from each other.
   • Brand identity is relatively weak.
   • Not price takers - only have limited degree of control over prices.

4. Perfect Competition

   • Large number of businesses - no 1 business is big enough to influence other businesses.
   • They are price takers - due to no market/price leaders.
   • Goods sold are homogenous - no difference between goods from businesses.
   • Businesses have equal access to technology.
   • Consumers have full market information.