Market in econmoy Essay Example | Topics and Well Written Essays - 1500 words

Market in econmoy - Essay Example In oligopoly the whole market is controlled by small group of firms. Here at least two firms control the market. This market has small competition with high price. Monopolistic competition is an imperfect competition where many producers sell different types products. There are large numbers of customers and sellers. In monopoly market there is a single supplier and large number of buyer. The seller produces a particular commodity. This four types of market rules the economy. The characteristics of perfect competitive market are the buyers and sellers cannot affect the price of the market. Here the firms always try to maximize the profit by increasing the output levels. A huge amount of competition exists in the market. Entry and exit from this market is very easy for the firms. Barriers in entering the market are less. Many small firms are present in a large number (Dwivedi, 2002). Almost identical products are sold by the companies. There is a perfect knowledge of price and technology is present in the market. All the firms in perfect competition maintain almost the same price and faces horizontal demand. In monopolistic competition there are different types of product with many firms. The products of the companies are almost same. The firms produce close substitute products. This market is characterized with various products and many firms. In the long run of monopolistic competition there is no exit and entry cost in the long run. The buyers and sellers are the independent in making decision (Dwivedi, 2009). They don’t have perfect information about the market. The companies in this market incur a huge expenditure on its advertisements for attracting customers. The firms charge the price which is higher than marginal cost. A firm operating in a monopoly market is the only seller of products or services without any such close substitutes. Monopoly market represents a specific economic structure. Monopolies are usually characterized by competition