No of the firms in the market
Perfect competition – It is basically a hypothetical aspect according to which in the case of perfect competition there can be a lot of firms in the same market.
Monopoly – In this type of market only one company owns the whole market.
Monopolistic competition–In this type of competition there are many companies present in the competition.
Oligopoly – In this type of market there are very less no of firms present in this type of market (Ferrer, 2013).
Diagram of perfect competition
- Similarity in the sold products
Perfect Competition-In this type of market, the products sold are similar.
Monopoly – there is only one company selling unique products that are not identical but similar.
Monopolistic Competition – In this situation firms sell products that are not identical but similar.
Oligopoly – In the case of oligopoly situation firms sell products that are similar or identical (Ferrer, 2013).
- Entry Barriers
Perfect Competition – There are no barriers to entry in this market anybody can enter it (Ukav, 2017).
Monopoly – In this type of market, it is very hard to enter because there is a single seller who owns the whole market.
Monopolistic competition – The barriers to entry in such a market are low because the decisions of one firm do not impact the competitors
Oligopoly – There are barriers to entry in this type of market because there the companies have some patents on the raw materials (Ukav, 2017).
- Crown casino operating in Melbourne
The no. of casinos operating in Melbourne is 5 so it will lie under an oligopoly market
Star casino operating in Sydney
The total no. of casinos in Sydney is 10 that are serving similar products but not identical so it will lie under a Monopolistic market where there are a lot of firms present.
- Star casino or Crown casino operating in the global casino market
Lie under a Monopolistic market because there are a lot of casinos present globally that tend to serve similar but non-identical products and their personal decisions d not impact their work.
- Fish and takeaway shops found in suburbs
This lie under a monopolistic market because there are many businesses like this found under this type of market due to less competition.
- List of banks in Australia
In Australia, the market structure for banks is an oligopoly because there are few large banks operating in Australia who are responsible for controlling a significant proportion of business across Australia.
- A small stall in one of Melbourne/Sydney’s Sunday markets
It also lies under monopolistic competition because there are many stalls located in the market selling similar or non-similar products.
- A hair salon in the suburb
It also lies under monopolistic competition because there are many competitions located in the market that sell similar products.
- The only drive-in cinema
It lies under a monopoly market where there is only one firm is providing the services to many customers.
- The liquor retailing industry in Australia
It lies under monopolistic competition because there are many competitors located in the market who sell similar products.
In Perfect Competition, it is a hypothetical assumption in which there is an ideal situation where all the consumers and producers have symmetric and full information and there is no transaction cost. In this type of competition, there is a large no
If a business wants to earn a super normal profit in perfect competition then they can make it only in the short run.
But in general, the supernormal profit can be earned in a monopoly market in both the conditions long run and short run because here the seller has control over the prices of the product and also regulates the entry of new firms as it is restricted.
According to this, there are many producers in the market who sell the same types of products and services at the same prices, and in this type of market, any type of producer can enter because there are no barriers required to enter the market.
In Monopoly competition, there is only a single seller who sells a unique type of product in the market; in this type of market the seller faces no competition because he is the only seller of that goods and services with no close substitute.
In the long run when the level of production increases as average cost declines the company is said to achieve economies of scale
Economies of scale – When one or more units of services and goods are produced on large scale by investing fewer input costs then the firm achieves economies of scale (Anwar & Ali,2015).
In general terms, it is the condition in which the production units increase and a company grows. In this, the firm gets a nice chance to decrease the cost.
Economies of scale are achieved when there is an increase in the economic growth of the company.
According to Adam Smith, specialization and division of labor are the key means that help the company in achieving a large return on production.
By including these two skills the task could be performed in a better and faster way(Anwar & Ali, 2015).
A natural monopoly arises due to unique circumstances where the significant economies of scale and start-up cost lead to a big firm that is efficient in providing services in its territory.
A natural monopoly arises because economies of scale make it easy for a particular company in providing services.
Non-price competition refers to the strategy of marketing where one firm tries to distinguish the services and products from competing for services and products according to attributes like workmanship and design (Hatfield, et al., 2016).
The non-price competition involves ways that are implemented by the firm that helps to attract customers and increase sales through methods that are other than price. The non-price competition includes unique selling points, quality of product, after-sales service, superior location.
In the firm, the non-price competition involves promotional expenditures like selling staff, advertising, sales promotion, location convenience, special orders, coupons, new product development, marketing research, brand management costs, etc.
Mostly it is experienced under monopolistic markets and oligopoly markets (Hatfield, et al., 2016).
In this situation, both the firms are facing a monopolistic situation because in monopoly competition the firms face no competition and there are no other sellers present in the market so their performance is solely based on the decisions made by them. In this situation where the firm is facing a rise in demand for the product when the price of the good is decreasing and vice versa can be observed in a monopolistic situation more because there are a huge no. of producers present in the market who are selling the same product and cut-throat (Yu, et al., 2012). Competition is also found in such type of market so many companies use these practices this type of situation mainly occurs in monopolistic competition.
As per the market structure of monopolistic competition, there are many producers located in the market who sells a variety of products and in this market, there is very less competition
In Monopoly competition, there is only a single seller who sells a unique type of product in the market, in this type of market the seller faces no competition because he is the only seller of that goods and services with no close substitute(Yu,et al., 2012).
Anwar, R. S., & Ali, S. (2015). Economies of scale. International Interdisciplinary Journal of Scholarly Research, 1(1), 51-57.
Ferrer, C. E. (2013). Oligopsony-Oligopoly The perfect imperfect competition. Procedia Economics and Finance, 5, 269-278.
Hatfield, J. W., Plott, C. R., & Tanaka, T. (2016). Price controls, non-price quality competition, and the nonexistence of competitive equilibrium. Games and Economic Behavior, 99, 134-163.
Ukav, I. (2017). Market structures and concentration measuring techniques. Asian Journal of Agricultural Extension, Economics & Sociology, 19(4), 1-16.
Yu, R., Yang, W., & Rahardja, S. (2012). A statistical demand-price model with its application in optimal real-time price. IEEE Transactions on Smart Grid, 3(4), 1734-1742.