In today's economy shared types of market structures in the form and degree of freedom.Each type has its advantages and disadvantages.
In economics, there are the following main types of market structures.The first is the perfect competition - a market in which operates a huge number of small firms.They tend to be engaged in the production of the same products.Therefore, they have no opportunity to control their own prices.An example of such markets may be the fish market, agricultural products or the stock market.All types of market structures have their own characteristics.Features of perfect competition:
1) Advertising useless.
2) In order to further the seller has joined the production of similar products, there are no barriers.
3) The number of buyers in the market, as well as merchants, a great many.
second type of market structure - is monopolistic competition - a market in which small firms produce the same products, but, nevertheless, have the ability to control prices.To the manufacturer was able to raise the price of their goods, they need something to outperform its competitors.This may be the product quality or the quality of customer service.An important role in this is to provide warranty service, the presence of which allows the seller to increase the price of their product.Also, an increase in cost can be attributed location, because in the cafe next to the house people will walk more often than that which is three blocks away.In this type of market structure, if opposed to products of its competitors still have a need to give publicity to inform consumers about this.
classification of market structures occurs in the number of companies present in the market.For example, the third type, ie an oligopoly - a market owned by a few large firms.This is because the barriers to entry in this sector of production are high.They are:
1) The huge start-up capital needed to start the production of goods.
2) Business secret.
3) The need for compliance with copyright or patent law.
4) compulsory licenses for the production.
Prices of goods in oligopoly established on the principle of price leadership.And the competition is going on around consumer properties of goods.Advertising spend huge sums.Examples of such markets are: the market of the computers, the market perfumes, cars, oil and phones.
types of market structures distinguish based on various attributes and features.So that's the fourth kind - it is a monopoly, that is the market, the seller owned the only product that has no analogues.This type of market structure is not beneficial to consumers, as a monopolist is not interested in improving the quality of its product and its diversity, in addition it has the ability to set high prices.Sign in such a market is locked.Advertising monopoly is not necessary, because of its product, and so we all know.
