Market Structure : A Competitive Market

1359 WordsApr 11, 20156 Pages
Market structure is about the number of competition that exists in a market among producers. The level of competition can be thought of as a continuous sequence with very competitive market at one end and the other end consist of market in which no competition exists. Market structure is important because of the implications it has for conduct and performance and the fact that it has an impact upon the strategic possibilities which faces the organization. Perfect competition This market structure is the most competitive there are many buyers and sellers and they are too small to have any level of individual control over prices. The type of product is identical, information regarding availability can be easily access by both buyers and sellers. In order for firm to try and maximise their profit they will need to decide what level of output need to produce by setting the cost of producing the last unit of the good equal to the revenue gained from the sale of the last unit. Monopoly market situation where a single producer or a supplier of producer having control over the supply of good and service. They have pricing power within the industry. There is only one supplier and they have the marketing power that enables that to determine price of their product. They entry barriers is high so they faces less competition. Monopolistic competition In this market type there are many suppliers, there product are differentiated. The market entry is easy and there is no competition in

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