Title: Types Of Market Structures | Pure, Perfect Competition
Headings: What is Market Structures? Types of Market Structures
What is Market Structures? Types of Market Structures
What is Market Structures? Types of Market Structures
What is Market Structures?
Types of Market Structures
Pure Competition
Perfect Competition
Perfect Competition Characteristics
Large number of buyers and sellers
Homogenous product
Ease of entry and exit from the market
Perfect knowledge
No transportation costs
Imperfect Competition
Types of Imperfect Competition
Monopolistic competition
Monopolistic Competition Characteristics
Oligopoly
Oligopoly characteristics
Monopoly
Monopoly characteristics
Price Discrimination Under Monopoly
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Content: This is because the market sets the price for the market, making sellers as price takers. Moreover, in a purely competitive market, all the products are considered as substitutes of one another. Therefore, if there is a rise in the price of a product from one producer, buyers can easily purchase the similar product from the other seller. In a purely competitive market, due to the absence of legal, technological, financial or other barriers, it is easy for a new organisation to enter or exit the market. However, the existence of pure competition is not possible in the real world. In pure competition, the homogeneity of the products with a fixed market price is shown by the average revenue curve or the demand curve as a horizontal straight line. Average Revenue Curve under Pure Competition
In Figure, OP is the price level at which a seller can sell any quantity of products. Perfect Competition
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 the market price. Perfect competition is a type of market structures which is extension of pure market subject to a wider scope. Perfect Competition Characteristics
The main perfect competition characteristics are discussed below: