eBay & Weird Al
There are a variety of different business structures that comprise the market in the world today. The most common ones found in the business world today are sole proprietorships, partnerships, and corporations. From these you will also find monopolies and oligopolies. Economists assume there are a number of different buyers and sellers in the market which leads to competition which allows prices to change in response to changes in supply and demand.(1) In many industries you there are substitutes for products, so if one type of product becomes too expensive the consumer can choose an alternative product that is cheaper, or one of better quality. This is called perfect competition within different companies. However, in some industries there are no substitutes for a product. In a market with only one supplier of a good or service, the producer can control the price meaning that the consumer does not have a choice, cannot maximize his or her total utility, and has very little to no influence over the price of the good or service they require. This is called a monopoly, where the single business is the industry. In slight contrast, you have the oligopoly which is at least two companies competing for market share. In an oligopoly, products are usually very similar, if not identical to each other, and in order to make their product more attractive they will lower their prices, forcing the other one out of the market until that firm lowers their price. Finally, the fourth type of business structure is called monopolistic competition. Like an oligopoly, these firms produce similar or identical products where substitute products usually aren’t available, although monopolistic competition is between many firms, where an oligopoly is usually two or three different companies controlling the market. In monopolistic competition, a firm takes the prices charged by its rivals as given...