Competition : Perfect Competition Is An Economic Concept Essay

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Question 7
Perfect competition: Perfect competition is an economic concept, there are lots of seller’s sells homogeneous products in the market and there are many buyers. There are no barriers to enter into the market. Furthermore both the buyers and sellers have good information regarding price so that sellers can offer a competitive price to the buyers and also buyers can compare the price to have the best choice.
Monopolistic competition: Monopolistic competition is market structure in which firms have lots of competitors in the market but everyone sells slightly different products. Examples grocery shops and Restaurants in Newzealand.
Oligopoly: Oligopoly is a market structure where there are a few sellers selling slightly different products to each other in the market but have significant influence in the market price. Examples banks and Airlines.
Monopoly: Monopoly is a market structure where there is an only one seller sells product in the market. There are no any competitors in the market and firm have full control on the price.
Characteristics of each market structures:
Perfect competition
1) There is no need for government regulation expects to make markets more competitive.
2) There are huge numbers of competitors in the market
3) Firms produce homogenous products which are not branded.

 Monopolistic competition
1) Each company can makes their own decision regarding price and output based on its products. 2) All firms are able to enter
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