FOUR MARKET

STRUCTURES
APPLIED ECONOMICS
 PERFECT COMPETITION

• In economic theory, perfect competition occurs when all companies sell

identical products, market share does not influence price, companies are
able to enter or exit without barriers, buyers have perfect or full
information, and companies cannot determine prices.
• In some cases, there are several farmers selling identical products
to the market, and many buyers. At the market, it is easy to
compare prices. Therefore, agricultural markets often get close to
perfect competition.
 PERFECT COMPETITION
• The three primary characteristics of perfect competition are (1) no company holds a
substantial market share, (2) the industry output is standardized, and (3) there is
freedom of entry and exit. The efficient market equilibrium in a perfect competition is
where marginal revenue equals marginal cost.
 MONOPOLISTIC COMPETITION
• Monopolistic competition exists when many companies offer competing
products or services that are similar, but not perfect, substitutes. The
barriers to entry in a monopolistic competitive industry are low, and the
decisions of any one firm do not directly affect its competitors.
• Monopolistic competition is a type of market structure where many
companies are present in an industry, and they produce
similar but differentiated products. None of the companies
enjoy a monopoly, and each company operates independently
without regard to the actions of other companies.
 MONOPOLISTIC COMPETITION

• Restaurants, hair salons, household items, and clothing are examples of

industries with monopolistic competition. Items like dish soap or
hamburgers are sold, marketed, and priced by many competing
companies.
• Meralco Electric Company is a perfect example of monopoly in
the Philippines. Monopoly in Philippines Meralco, the only supplier
of electricity in the country. since if you complain or don't pay your
bills, they just cut off your electricity.
 OLIGOPOLY
• Some examples of oligopolies include the car industry, petrol retail,
pharmaceutical industry, coffee shop retail, and airlines. In each of
these industries, a few large companies dominate
• An oligopoly is a market structure in which a few firms dominate. When a
market is shared between a few firms, it is said to be highly concentrated.
Although only a few firms dominate, it is possible that many small firms may
also operate in the market. Some examples of oligopolies include the car
industry, petrol retail, pharmaceutical industry, coffee shop retail, and airlines.
In each of these industries, a few large companies dominate. Considering the
market for air travel, major airlines like British Airways(BA) and Air France
often operate their routes with only a few close competitors, but there are also
many small airlines catering for the holidaymaker or offering specialist
services
 OLIGOPOLY
• Throughout history, there have been oligopolies in many
different industries, including steel manufacturing, oil,
railroads, tire manufacturing, grocery store chains, and
wireless carriers.
• However, because the production of the products requires
large amounts capital and exhibits steep economies of scale,
the entry of firms is limited. Products produced by a
differentiated oligopoly include electronics, cereals,
cigarettes, sporting goods, motor vehicles, and aircraft.
 MONOPOLY
• In economics, a monopoly is a single seller. In law, a
monopoly is a business entity that has significant market
power, that is, the power to charge overly high prices, which
is associated with a decrease in social surplus.
• In economics, a monopoly is a single seller. In law, a
monopoly is a business entity that has significant market
power, that is, the power to charge overly high prices, which
is associated with a decrease in social surplus.
 MONOPOLY
• Monopoly. A monopoly is a firm who is the sole seller of its
product, and where there are no close substitutes. An
unregulated monopoly has market power and can influence prices.
Examples: Microsoft and Windows, DeBeers and diamonds, your
local natural gas company.
• Natural gas, electricity companies, and other utility companies are
examples of natural monopolies. They exist as monopolies because the
cost to enter the industry is high and new entrants are unable to provide
the same services at lower prices and in quantities comparable to the
existing firm.
•
 MONOPOLY
• Public utilities: gas, electric, water, cable TV, and local telephone
service companies, are often pure monopolies.
• First Data Resources (Western Union), Wham-O (Frisbees), and
the DeBeers diamond syndicate are examples of "near"
monopolies.
• Meralco Electric Company is a perfect example of monopoly in
the Philippines. Monopoly in Philippines Meralco, the only supplier
of electricity in the country. since if you complain or don't pay your
bills, they just cut off your electricity.
FOUR MARKET STRUCTURES

• these four market structures each represent an

abstract (generic) characterization of a type of real
market. Market structure is important in that it
affects market outcomes through its impact on
the motivations, opportunities and decisions of
economic actors participating in the market.