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ECONOMIC FOR MANAGERS.pptx

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Subhasis Nayak

There are several types of imperfect competition in markets: 1. Monopoly - A single seller dominates the market for a product with no close substitutes and can influence prices. Examples include Google search and UK utilities with over 25% market share. 2. Oligopoly - A market with few sellers that may collude to influence prices like Airbus and Boeing in commercial aircraft. 3. Monopolistic competition - Many similar but not identical product sellers that are price makers but do not influence each other like retailers. 4. Monopsony/oligopsony - A market with many sellers but few dominant buyers that can negotiate prices down like large cigarette companies buying tobacco.

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SAMBALPUR UNIVERSITY, JYOTI VIHAR,BURLA Subject-Economic for Managers. Semistar-1st paper code-COM 414 F.M-20 1)Describe Different Types of Competition in Imperfect Market Structure. -Sujata Pani-
Describe Different Types of Competition in Imperfect Market Structure- What Is an Imperfect Market? An imperfect market refers to any economic market that does not meet the rigorous standards of the hypothetical perfectlyor purelycompetitive market. Pure or perfect competition is an abstract, theoretical market structure in which a series of criteria are met. Since all real markets exist outside of the spectrum of the perfect competition model, all real markets can be classified as imperfect markets. In an imperfect market, individual buyers and sellers can influence prices and production, there is no full disclosure of information about products and prices, and there are high barriers to entry or exit in the market.
KEY TAKEAWAYS- Imperfect markets do not meet the rigorous standards of a hypothetical perfectly or purely competitive market. Imperfect markets are characterized by having competition for market share, high barriers to entry and exit, different products and services, and a small number of buyers and sellers. Perfect markets are theoretical and cannot exist in the real world; all real-world markets are imperfect markets. Market structures that are categorized as imperfect include monopolies, oligopolies, monopolistic competition, monopsonies, and oligopsonies.
Types of Imperfect Markets- When at least one condition of a perfect market is not met, it can lead to an imperfect market. Every industry has some form of imperfection. Imperfect competition can be found in the following structures: 1.Monopoly 2.Oligopoly 3.Monopolistic Competition 4.Monopsony and Oligopsony
1.Monopoly- This is a structure in which there is only one (dominant) seller. Products offered by this entity have no substitutes. These markets have high barriers to entry and a single seller who sets the prices on goods and services. Prices can change without notice to consumers. For example, 1. in the UK, a company is considered to have monopoly power if its market share is higher than 25% 2.Google has over 90% of search engine traffic and can be considered a monopoly in the UK.
2.Oligopoly- This structure has many buyers but few sellers. These few players in the market may bar others from entering. They may set prices together or, in the case of a cartel, only one takes the lead to determine the price for goods and services while the others follow. For Example- Airbus and Boeing are good examples of oligopoly market structures. In this type of market, you have these two companies producing almost half of the worlds commercial aircraft.
3.Monopolistic Competition- In monopolistic competition, there are many sellers who offer similar products that can't be substituted. Businesses compete with one another and are price makers, but their individual decisions do not affect the other. 4.Monopsony and Oligopsony- These structures have many sellers, but few buyers. In both cases, the buyer is the one who manipulates market prices by playing firms against one another. For example- There are many tobacco sellers in the world, but there are only a few large companies that produce cigarettes. These few companies are the buyers who buy from many tobacco sellers in the world. They can easily negotiate and bring down the prices.
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ECONOMIC FOR MANAGERS.pptx

  • 1. SAMBALPUR UNIVERSITY, JYOTI VIHAR,BURLA Subject-Economic for Managers. Semistar-1st paper code-COM 414 F.M-20 1)Describe Different Types of Competition in Imperfect Market Structure. -Sujata Pani-
  • 2. Describe Different Types of Competition in Imperfect Market Structure- What Is an Imperfect Market? An imperfect market refers to any economic market that does not meet the rigorous standards of the hypothetical perfectlyor purelycompetitive market. Pure or perfect competition is an abstract, theoretical market structure in which a series of criteria are met. Since all real markets exist outside of the spectrum of the perfect competition model, all real markets can be classified as imperfect markets. In an imperfect market, individual buyers and sellers can influence prices and production, there is no full disclosure of information about products and prices, and there are high barriers to entry or exit in the market.
  • 3. KEY TAKEAWAYS- Imperfect markets do not meet the rigorous standards of a hypothetical perfectly or purely competitive market. Imperfect markets are characterized by having competition for market share, high barriers to entry and exit, different products and services, and a small number of buyers and sellers. Perfect markets are theoretical and cannot exist in the real world; all real-world markets are imperfect markets. Market structures that are categorized as imperfect include monopolies, oligopolies, monopolistic competition, monopsonies, and oligopsonies.
  • 4. Types of Imperfect Markets- When at least one condition of a perfect market is not met, it can lead to an imperfect market. Every industry has some form of imperfection. Imperfect competition can be found in the following structures: 1.Monopoly 2.Oligopoly 3.Monopolistic Competition 4.Monopsony and Oligopsony
  • 5. 1.Monopoly- This is a structure in which there is only one (dominant) seller. Products offered by this entity have no substitutes. These markets have high barriers to entry and a single seller who sets the prices on goods and services. Prices can change without notice to consumers. For example, 1. in the UK, a company is considered to have monopoly power if its market share is higher than 25% 2.Google has over 90% of search engine traffic and can be considered a monopoly in the UK.
  • 6. 2.Oligopoly- This structure has many buyers but few sellers. These few players in the market may bar others from entering. They may set prices together or, in the case of a cartel, only one takes the lead to determine the price for goods and services while the others follow. For Example- Airbus and Boeing are good examples of oligopoly market structures. In this type of market, you have these two companies producing almost half of the worlds commercial aircraft.
  • 7. 3.Monopolistic Competition- In monopolistic competition, there are many sellers who offer similar products that can't be substituted. Businesses compete with one another and are price makers, but their individual decisions do not affect the other. 4.Monopsony and Oligopsony- These structures have many sellers, but few buyers. In both cases, the buyer is the one who manipulates market prices by playing firms against one another. For example- There are many tobacco sellers in the world, but there are only a few large companies that produce cigarettes. These few companies are the buyers who buy from many tobacco sellers in the world. They can easily negotiate and bring down the prices.