What Model Of Market Structure

An oligopolistic market is one that has several dominant firms with the power to influence the market they are in; an example of this could be the supermarket industry which is dominated by several firms such as Tesco, Sainsbury’s, and Waitrose etc... Furthermore an oligopolistic market can be defined in terms of its structure and its conduct, which involve various different aspects of economics.

Monopolies are defined as an industry dominated by one corporation, or business, like standard oil. They are a main driver of inequality, as profits concentrate more on wealth in the hands of the few.(Atlantic). A monopoly has total or nearly all control of that industry. They are considered an extreme result of the U.S. free market capitalism. The business own everything, from the goods to the supplies to the infrastructure. This company will become big enough to buy out other competitors or even crush their competitor by lowering their prices to get the other business to go out of business. They will then control the whole industry without any restarted, having the prices be what they want and the product to be in what condition they want

A monopoly is distinguished from a monopsony, in which there is only one buyer of a product or service; a monopoly may also have monopsony control of a sector of a market. Likewise, a monopoly should be distinguished from a cartel (a form of oligopoly), in which several providers act together to coordinate services, prices or sale of goods. Monopolies, monopsonies and oligopolies are all situations such that one or a few of the entities have market power and therefore interact with their customers (monopoly), suppliers (monopsony) and

Oligopolies are a type of market structure evident in Australia, which is comprised of 2 or more firms having a significant share of the market. In an oligopoly the few firms sell similar but differentiated or homogenous products and is characterised by a large number of buyers making it a form of imperfect competition. This market structure is evident through the Big Four Banks, Phone Industry - Vodafone, Optus and Telstra.

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Finally, you may be asking “Are oligopolies harmful or beneficial to the consumer?” There are some economists who view oligopolies as negative, stating that they artificially inflate prices and inhibit healthy competition between companies. They claim oligopolies are one step away from monopolies, and that without restriction placed upon their activities, oligopolists will tend toward monopolistic price fixation. However, these statements are normative, and completely unfounded. The fact is that firms do not strive to be monopolies. They prefer some healthy competition. It keeps them current and innovative, and provides the framework for cutting costs, finding more efficient production methods and developing new products. Most importantly, it keeps them out from under government scrutiny, as a monopoly would be. Consumers benefit from this in the form of lower prices and more variety. In fact, as you look at our current economy, you can see these points supported everywhere. First, the competition

An Oligopoly refers to a market structure where-by the suppliers have formed some form of cartel and are acting in unison. In such a case the suppliers have the power to determine the price of the commodity and may set any price.

There are four types of market structures: Monopolistic Competition, Monopoly, Oligopoly, and Perfect Competition. Monopolistic Competition is also known as competitive market. In this market structure, there are a large number of firms that produce similar but somewhat differentiated products for the same target customers. The market share is also divided among large number of firms making it difficult for one firm to become the market leader. On the other hand, Monopoly is a type of market structure in which only one firm controls the whole industry. There are strict barriers to entry for new firms due to governmental restrictions or the monopolistic power of the firm itself. In Oligopoly, the whole industry is dominated by a few large scale firms that set prices, introduce innovative products, and use heavy campaigns to attract buyers. All other small scale firms follow the changing market patterns set by these oligopolistic firms. Lastly, perfect competition is a market structure in which there are a larger number of firms that produce similar as well as differentiated products for

Market structure is the physical characteristics of the market within which companies react. This means that there are different kinds of market structure based on how companies work together within a particular industry. Location and product have the most to do with determining the market structure. There are four defined market types. The first market structure is called the perfectly competitive market. The second market is called a monopoly market structure. The third market is called monopolistic competition market structure. The final market is called oligopoly market structure. Each market structure is different and both benefits and disadvantages

An oligopoly exists when a few firms control most of the industry. There are many industries in the American economy that are controlled by oligopolies. The automotive industry, Smartphones, cellular service providers, film companies, and toothpaste are all industries considered oligopolies. Each of these industries is dominated by just a few corporations. To the average consumer, it can sometimes be unclear just how much a single corporation controls. Companies will regularly merge under one parent company yet retain their individual names. This leads to the appearance of choice yet, no matter what, our money is going to one of the same few companies. Due to the amount of control these corporations have over the industry, they can often behave in an almost monopolistic

Oligopoly has been derived from Greek implying "few sellers". According to Sloman & Sutcliffe (2001) oligopolies are a type of imperfect market wherein a few firms share a huge proportion of the industry. Therefore industries such as oligopolies have dominance of small number of manufacturers which may produce either differentiated or almost similar products. Nevertheless there are differences between perfect oligopolies and imperfect oligopolies. While perfect oligopolies are characterized by firms that produce almost identical products like tea or CDs, imperfect oligopolies differentiate themselves through niche products such as motor cars and aircrafts. Oligopolies are marked by interdependence of firms operating in the market which either collude or compete among themselves. In collusion, firms consent to avoid competition amongst them. A formal collusion is a cartel wherein firms act like a monopolist and earn maximum profits. (Wellmann, 2004, pp: 1-2)

There are essentially three economic market structures that create completion barriers within their given market. These structures are corporate monopolies, oligopolies, and conglomerates. Though they all have the similarity of limited competition, they also hold some distinctions as well. Monopolies are market structures that contain one dominating, wealthy corporation. Monopolistic firms use anti-competition practices to create hardship for competitors making it nearly impossible to enter or compete in the same market (Friedrichs, 2010, p.86). However, the Sherman Antitrust Act in 1890 made monopolies illegal, so now large corporations have shifted away from monopolizing practices and lean towards oligopoly and conglomerate market structures

•Oligopoly: This is an industry with very little firms in the market. If they conspire, they weaken output and raise profits the way a monopoly would and should do. For example the mobile phone industry is an oligopoly what with so many companies for example Apple, LG and Samsung all competing together. Supermarkets are oligopoly’s as they make supernormal profits as well.

The price is determined by supply and demand. The firm only has control on mark ups

a) In a perfect competitive market, the sole determinant of pricing is the market demand and the supply curves. A demand curve refers to the total amount that consumers will pay for their products. The supply curve is the total amount that the producers can actually make to supply to the company at the price they can afford or are willing to pay. Another factor in a perfect competitive market structure is the equilibrium price which is basically when the supply of the market meets the market demand of the consumers. Anther unique feature of a perfect competition market is that it is a price taker. In essence, this means that the company doesn’t have any influence on the price. Again, this can only be caused through a market that has a large number of firms with identical products. (Samuelson and Marks, 2010).