Economists classify the market in different ways. In the main, types of markets are examined in four categories which are ‘monopoly, oligopoly, monopolistic competition and perfect competition’. There are some major features that separate these types of markets. A monopoly is a structure in which a single supplier produces and sells a given product. (E.g. IGDAS, ISKI, OPEC) If there is a single seller in a certain industry and there are not any close substitutes for the product. Under monopoly there is no rival or competitors. Basically there are four features of monopoly. First one is strong barriers on the entry of new firms. As there is one firm no other rival producers can enter the market of the same product. Since the monopolist has absolute control over the production and sale of the commodity certain economic barriers are imposed on the entry of potential rivals. Secondly, under monopoly there are large numbers of buyers although the seller is one. No buyer's reaction can influence the price. Third one is under monopoly a single producer produces single commodities which have no close substitute. Monopoly can not exist when there is competition and lastly, in case of monopoly one firm constitutes the whole industry. The entire demand of the consumers for a product goes to the monopolist.
In an oligopoly there are very few sellers of the good. The product may be differentiated among the sellers (e.g. automobiles, cell phones, gas and so on). This means that the small amount of sellers all tend to be aware of one another and what business decisions they are all making. Since there are few numbers of firms of producing a given product, there is competition into production of quality products and services. There is availability of information is a little bit easy in terms of costs as compared to a monopoly market structure. In such an industry there is easier entry and exit which is quiet better than that of monopoly which is blocked....
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