Perfect Competition, Monopoly, Monopolistic Competition and Oligopoly
Market can be defined as an area where buyers and sellers meet and come in contact with each other by any means of communication in order to get information, exchange of various goods and services and are interested to do business. From this definition we may be traced out following four essentials which market has:
1. The existence of good which is dealt with.
2. The existence of buyer and seller.
3. The existence of place, be it a certain region, a country or it may the entire world.
4. The existence of such close contact between buyers and sellers that only one price should prevail for the same thing at the same time.
In addition to, Markets deals with goods...
The whole market supply consists of the product of this firm. It is thus, a single-firm industry, only a soul producer who deals with that commodity and for this reason the price of the commodity is fully controlled by the monopolist and has no fear of rivals. Monopoly arises when there are barriers to entry of a new firm into the industry. It may legal or natural barriers. Monopolies are usually under attack from new entrants and ideas substitute for commodities produced by monopolies. Further, it is one man show for this reason monopolist get advantages of controlling price, sets own price and thus exploits other’s rights and sometimes faces markets constraints. Thus, we can say that monopoly doesn’t lead market in a volatile condition, discourages young entrepreneurs and left consumers deprived of...
Every firm differentiates their burger. As Wendy’s high their prices, their customers will start eating at Burger King, while other stay with Wendy’s.
Pepsi and Coke war is famous. They don’t fight on prices, quantity or quality but all they focused on fighting with advertisement.
An oligopolistic market is the market which is comprised of a few firms which either produce identical products or produce such products which are tough close yet not perfect substitutes of each other. There are very few dominant key players which rules on market, customers are bound and confines to purchase from them and these players set price with mutually consideration but we found pricing strategy a bit rigid no price war takes place among them. New entrants are face barriers to enter and found it tough to be the same producers of the product as huge investment required and chances of failure are too high in this...
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