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: Therefore, buyers can purchase products from any seller as there is no difference in the price and quality of products of different sellers. Under pure competition, sellers cannot influence the market price of products. This is because if a seller increases the prices of its products, customers may switch to other sellers for getting products at lower price with the same quality. On the other hand, if a seller decreases the prices of its products, then customers may become doubtful about the quality of products. Therefore, in pure competition, sellers act as price takers. In addition, in a purely competitive market, there are no legal, technological, financial, or other barriers for the entry and exit for organizations. In pure competition, the average revenue curve or demand curve is represented by a horizontal straight line. This implies the homogeneity of products with fixed market price. Figure-2 shows the average revenue curve under pure competition curve: In Figure-2, OP is the price level at which a seller can sell any quantity of products at the fixed market price.