Types of Markets
1. Perfectly Competitive
It has many buyers and sellers
All firms sell identical goods
Firms can easily enter and exit the market.
Perfectly competitive firms produce the quantity of output at which marginal revenue equals marginal cost. Profit is a signal to firms that are not currently in the market. There is little control over the price. Examples of perfectly competitive market are wheat, corn, and stocks.
2. Competitive Monopolistic
It has many buyers and sellers
Firms produce and sell slightly different products.
Firms can enter and exit easily.
In a monopolistic market, a firm can change the price of its products and still expect to sell some units. What a monopolistic firms sell is not identical to any other product in the market. A monopolist competitive firm produces the quantity of output at which marginal revenue equals marginal costs. Similar products can be differentiated by packing, sales services, and delivery options. Examples consist of clothing and meals at restaurants.
3. Monopolistic
It has a single seller
The single seller sells a product that has no close substitutes
The market has extremely high barriers to enter.
A monopoly finds the highest price at which it can sell its entire outputs. There are limits on how much a monopoly can change its products. Legal barriers to enter a monopolistic market include franchises, patents, and copyrights. Examples of a monopolistic market include water, electricity, or delivery of first-class mail.
4. Oligopolistic
It has few sellers.
Firms in the market produce and sell identical or slightly different products.
The barriers to enter are significant.
Oligopolistic firms can raise the price of their goods and sell some of their products. Oligopolistic product is not unique. They can be identified by looking at the percentage of sales accounted for by the top four markets in the industry. Examples of products in an oligopolistic market are cereal or cars.
It has many buyers and sellers
All firms sell identical goods
Firms can easily enter and exit the market.
Perfectly competitive firms produce the quantity of output at which marginal revenue equals marginal cost. Profit is a signal to firms that are not currently in the market. There is little control over the price. Examples of perfectly competitive market are wheat, corn, and stocks.
2. Competitive Monopolistic
It has many buyers and sellers
Firms produce and sell slightly different products.
Firms can enter and exit easily.
In a monopolistic market, a firm can change the price of its products and still expect to sell some units. What a monopolistic firms sell is not identical to any other product in the market. A monopolist competitive firm produces the quantity of output at which marginal revenue equals marginal costs. Similar products can be differentiated by packing, sales services, and delivery options. Examples consist of clothing and meals at restaurants.
3. Monopolistic
It has a single seller
The single seller sells a product that has no close substitutes
The market has extremely high barriers to enter.
A monopoly finds the highest price at which it can sell its entire outputs. There are limits on how much a monopoly can change its products. Legal barriers to enter a monopolistic market include franchises, patents, and copyrights. Examples of a monopolistic market include water, electricity, or delivery of first-class mail.
4. Oligopolistic
It has few sellers.
Firms in the market produce and sell identical or slightly different products.
The barriers to enter are significant.
Oligopolistic firms can raise the price of their goods and sell some of their products. Oligopolistic product is not unique. They can be identified by looking at the percentage of sales accounted for by the top four markets in the industry. Examples of products in an oligopolistic market are cereal or cars.
Prompting Question: What types of products do monopolies sell?
[email protected] Social Studies Date Created: May 2, 2013 Updated: May 18, 2013