4. Market. Market structures and their key characteristics

Do supply and demand affect the market price under monopoly? Why?

How does imperfect competition differ from perfect competition and monopoly? This market structure consist o industries and markets that fall in between two extremes of perfect competition and pure monopoly.

How does oligopoly differ from monopolistic competition? Because oligopoly its a term applied to market dominated by a few large firms. And monopolistic competition its a state of competition in a market in which many firms compete, producing similar but slightly differentiated products.

How does oligopoly differ from monopolistic competition? Monopolistic competition is found in many industries. An oligopoly is a market dominated by a few large suppliers.

How does product differentiation benefit consumers? Product differentiation benefits buyers by providing them with a way to distinguish between competing goods.

What are the characteristics of oligopoly? Oligopoly is characterized by: *a limited number of leading firms producing a particular brand product; *interdependence between firms; *barriers to entry; *lack of competitive pricing.

What are the features of perfect competition? Perfect competition is the name given to a market structure characterized by the following features: *there are a lot of buyers and sellers purchasing and selling exactly the same commodity; *Identical commodity is offered for sale; *Each buyer or seller has perfect knowledge of the market price and quantities; *There are no barriers to end the market.

What are the key characteristics of monopolistic competition? Monopolistic competition is characterized by: *a large number of firms producing similar but not identical products; * product differentiation;* some restrictions of information about market prices and quantities; * relatively easy entry for firms.

What are the principal types of market structures? The principal types of market structures are perfect competition, monopolistic competition, oligopoly, and monopoly.

What are the qualities of monopoly? Monopolies have the following qualities: *a single seller or monopolistic who determines supply and has complete control over the market price; *no close substitutes; *barriers to entry.

What characteristics define the structure of a market? Market structure can be defined in terms of the number and the power of the buyers and sellers, the nature of the product, barriers to entry and exit, and ability of information.

What distinguishes monopolistic competition from perfect competition? The process of creating uniqueness in products is know as product differentiation. It distinguishes monopolistic competition from perfect competition.

What does an identical commodity offered for sale denote under the conditions of pure competition? Identical commodity is offered for sale. It denotes that all units of the commodity are the same in the minds of buyers and they must be willing to purchase it from the seller who offers this product at the lowest price. It is one of features perfect competition.

What does an identical commodity offered for sale denote? Identical commodity is offered for sale. It denotes that all units of the commodity are the same in the minds of buyers and they must be willing to purchase it from the sellers who offers this product at the lowest price.

What does the characteristic of perfect competition “no barriers to enter or exit the market” mean? There are no barriers to enter or exit the market. It means that there must be no obstacles to prevent firms from entering or leaving the particular market at will.

What is a competitive market? Competitive market – its one in which there is only one price for a given commodity at any one time; all buyers and sellers know the market condition.

What is a market? Market is an actual or nominal place where forces of demand and supply operate, and where buyers and sellers interact (directly or through intermediaries) to trade goods and services.

What is competition? Competition – its the rivalry between suppliers in the same market, usually in selling at the lowest price or in giving better quality or generally offering better value for money.

What is imperfect competition? Imperfect competition – its a market in which there is neither pure perfect competition nor pure monopoly.

What is monopolistic competition? Monopolistic competition – its a state of competition in a market in which many firms compete, producing similar but slightly differentiated products.

What is monopoly? Monopoly – its a market in which there is only one sellers.

What is oligopoly? Oligopoly – its a term applied to market dominated by a few large firms.

What is perfect competition? Perfect competition its a market for uniform products in which there are many buyers and sellers, no one of whom is able to affect the price and has full knowledge of market condition.

What is product differentiation? Product differentiation – its a process of creating uniqueness in a product.

What types of market structure does imperfect competition comprise?

When is a market created? Market is created when there is the seller, the buyer, the price, the product and competition, the cornerstone of the free enterprise system.

Why can no individual alter the market price under the conditions of pure competition? Because in perfect competition there are many buyers and sellers, and they have full knowledge of the market conditions, but can not influence the market price.

Why do sellers compete with sellers and buyers with buyers? Because sellers want to sell more goods at price at which they will get the maximum profit and buyers want to buy more goods at lower prices.

Why does a firm try to differentiate its product? Product differentiation benefits sellers by enabling them to increase their market power.

Why is competitive pricing ineffective in the oligopolistic market? Because an oligopoly is a market dominated by a few large suppliers. Interdependence between firms suggests that each firm must take into account the possible reactions of other firms in the market when making pricing and investment decisions.

Why is it difficult for competing firms to enter the oligopolistic market? It denotes that competing firms can enter the markets only if they pay the patent holders for permission to use the process or find a new method of production not protected by existing patents.