Title: Types of Market Structures on the Basis of Competition
Headings: Types of Market Structures on the Basis of Competition
Types of Market Structures on the Basis of Competition
Figure-1 shows different types of market structures on the basis of competition:
1. Purely Competitive Market:
Figure-2 shows the average revenue curve under pure competition curve:
2. Perfectly Competitive Market:
Some of the definitions of perfect competition given by different economists are as follows:
In addition to conditions implied in pure competition, perfect competition also involves certain other conditions, which are as follows:
i. Large Number of Buyers and Sellers:
ii. Homogeneous Products:
iii. Free Entry and Exit:
iv. Perfect Knowledge:
v. Absence of Transport Cost:
vi. Perfect Mobility of Factors of Production:
3. Imperfectly Competitive Market:
There are different forms of imperfect competition, which are shown in Figure-3:
Monopoly:
Some of the definitions of monopoly given by different economists are as follows:
Following are the main features of the monopoly market structure:
i. Single Seller:
ii. No Substitutes of the Product:
iii. Barriers to Entry:
iv. Restriction on Information:
Some of the barriers to entry of new organizations are as follows:
i. Legal Restrictions:
ii. Resource Ownership:
iii. Efficiency in Production:
iv. Economies of Scale:
Monopolistic Competition:
Some of the definitions of monopolistic competition given by different economists are as follows:
Some of the characteristics of monopolistic competition are as follows:
i. Large Number of Sellers and Buyers:
ii. Differentiated Products:
iii. Free Entry and Exit:
iv. Restricted Mobility of Factors of Production:
v. Price Policy:
Oligopoly:
Some of the popular definitions of oligopoly are as follows:
The main characteristics of oligopoly are as follows:
i. Few Sellers and Many Buyers:
ii. Homogeneous or Differentiated Products:
iii. Barriers in Entry and Exit:
iv. Mutual Interdependence:
v. Lack of Uniformity:
vi. Existence of Price Rigidity:

Content: 2. Perfectly Competitive Market: In a purely competitive market, there are a large number of buyers and sellers dealing in homogenous products. A perfectly competitive market is a wider term than a purely competitive market. A perfectly competitive market is characterized by a situation when there is perfect competition in the market. Some of the definitions of perfect competition given by different economists are as follows: According to Robinson perfect competition can be defined as, “When the number of firms being large, so that a change in the output of any of them has a negligible effect upon the total output of the commodity, the commodity is perfectly homogeneous in the sense that the buyers are alike in respect of their preferences (or indifference) between one firm and its rivals, then competition is perfect, and its rivals, then competition is perfect, and the elasticity of demand for the individual firm is infinite.” According to Spencer, “Perfect competition is the name given to an industry or to a market characterized by a large number of buyers and sellers all engaged in the purchase and sale of a homogeneous commodity, with perfect knowledge, of market price and quantities, no discrimination and perfect mobility of resources.” In the words of Prof. Leftwitch, “Perfect competition is a market in which there are many firms selling identical products with no firm large enough relative to the entire market to be able to influence market price.” According to Bilas, “The perfect competition is characterized by the presence of many firms.