Market structure

Topics: Monopoly, Oligopoly, Perfect competition Pages: 9 (2187 words) Published: September 12, 2014

________________________________________________________________ Assignment Cover page
Student’s Name:
Abdulla Sodig
Student ID:
Hameed / Niha
Assignment #
Market structure
Required words:
Actual # of words:
2029 in the Answer
Date submitted:
10th Sept 2014
Due date:
10th Sept 2014
Declaration by student: I certify that this assignment is my own work in my own words. All sources has been acknowledged and the content of this has not been previously submitted to Mandhu college or elsewhere. I also confirm that I have kept a copy of this assignment.

Economics Assignment
Select an industry from Maldives and write a report of 2,000 words to include the following components. -          Type of market structure
-          Economic Theory on the market structure -          How theory of market structure relates to real industry -          Key players in the industry, key differences between players, strengths and weaknesses -          How they compete with each other

-          Is this industry good for society?
-          Total 50 marks

Telecommunication industry of Maldives
The very first telecom company which started telecommunication service in the Maldives is DIRAAGU (Dhivehi Raajjeyge Gulhun PVT LTD) as a joint venture of Maldivian government and Cable and wireless communication formed on 1st October 1988. It was the only company licensed to provide GSM and internet to the country until 2004 and 2005 respectively. At 2005 a middle east based company named Wathaniya telecom was licensed to provide GSM and internet services to the country while Raajje online was licensed to provide internet, in 2004. And DHIRAAGU is the only company still to provide landline services to the country. Telecommunication industry was a monopoly in Maldives from 1988 to 2004 where DHIRAAGU was the only service provider. And now it falls in to the market structure of an oligopoly which means few farms supplies identical products. Here are some details on types of market structures. Types of Market structures

It is an interconnected characteristic of a market where ease of entry to the market, number of buyers and buying power of them, sellers and degree of competition among them, collusion, product differentiation plays major roles. Four basic types of market structures are: 1- Perfect competition

2- Monopolistic competition
3- Oligopoly
4- Monopoly
There is also another market structure called Monopsony.

1- Perfect competition
It is considered more theoretical than practical, because it is very rare. In perfect competition a large number of firms sell identical products, where none of them has pricing power. There no berries or very easy to enter to the market by any new farm. They are also called price takers. Mostly all the firms will be selling products at same prices. For example if we go to normal retail shops to buy vegetables, we will get at same prices from each and every shop. Fish market at Male’ is a very good and a simple example, where inside the market lot of sellers will be selling same fishes. Prices will be set by the demand and supply. Neither buyer nor seller sets the price. It is more like automates pricing. Characteristics of perfect competition include large number of small firms, identical products, perfect resource mobility and perfect knowledge. 2- Monopolistic competition

It is almost like perfect competition where large number of small firms sells similar but not identical products. Relative freedom of entry, to and exit from the industry. It means buyers will have substitutes to choose from. Alternatives to buy for fulfil their needs and wants. Examples of industries structures as monopolistic competition includes, clothing industry, restaurants, and shoes and so on. 3- Oligopoly

It is a market situation where products are supplied by...

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