Perfect Competition

Number of Firm

There are many firm survive in the market.

Freedom of Entry

Entry is free. Everyone can operate his business without restriction.

Characteristics

Price Elasticity
Competition
Customer/Supplier
Optimizing Tool
Information
Product variety
Market Share
Examples

Price elastic ratio highly effect the decision making in perfect competition.
Too hard competition in this segment.
There are many customer and supplier in this kind of segment
Where the MR=MC, TC<TR & MR=AR
All the seller and buyer have a perfect information.
All the seller are selling homogenous product.
Market share is small in this case.
Gold, Silver & copper

Monopoly
Number of Firm

Only one firm survive in the market.

Freedom of Entry

Entry is stop through legal barrier, economies of scale & product differentiation.

Characteristics

Price Elasticity
Competition
Customer/Supplier
Optimizing Tool
Price Discrimination
Product variety
Market Share
Examples

Price elastic ratio highly not affect the decision making in monopoly.
No competition in this segment.
There are many customer and only one supplier in this kind of segment
Where the MR=MC, TC<TR & P>MC
Firm charge different prices to different customer.
No close substitute.
Market share is large in this case.
Natural monopoly in Pakistan is coal. Artificial created monopoly is WAPDA, SNGPL etc.

Monopolistic Competition
Number of Firm

There are many firm survive in the market.

Freedom of Entry

Few barriers for entry and on exit.

Characteristics

Price Elasticity
Competition
Customer/Supplier
Optimizing Tool

Price elastic ratio highly effect the decision making in monopolistic competition.
Too hard competition in this segment.
There are many customer and supplier in this kind of segment
Where the MR=MC, TC<TR & MR=AR

Information

All the seller and buyer have a perfect information.

Product variety

All the seller are selling close substitutes product.

Market Share
Examples

Market share is small in this case.

Fast food restaurants & clothing store.

Monopsony
Pricing policy

Characteristics

Freedom of Entry
Competition
Customer/Supplier

Buyer is a price maker with complete market control.

Buyers entry is banned.
Imperfect Competition prevail in this segment.
There are single customer in this kind of segment and purchase all output.

Optimizing Tool

Where the M=0, TC<TR

Product variety

No alternative.

Market Share
Examples

Market share is average in this case.

Industries.

Oligopoly

Characteristics

Number of Firm

There are few firm survive in the market.

Freedom of Entry

Many barrier exists in oligopoly.

Competition

High competition in this segment.

Customer/Supplier
Optimizing Tool
Sales
Product variety
Market Share
Examples

There are many customer and few large supplier in this kind of segment.
Where the MR=MC, TC<TR.
Use the marketing tools for increasing sales.
All the seller are selling same/different products.
Market share is average in this case.
Petroleum exporting countries, soft drinks and automobile.

Oligopsony
Characteristics

Customer/Supplier

There are few large customer and some supplier in this kind of segment.

Freedom of Entry

Significant barrier to entry.

Competition

Imperfect competition in this segment.

Optimizing Tool

Where the MR=MC, TC<TR.

Product variety

Firms sell either identical or differentiated products.

Market Share
Examples

Market share is average in this case.

American tobacco face an Oligopsony for cigarette makers.

Duopoly

Characteristics

Number of Firm

There are two firm survive in the market.

Freedom of Entry

Many barrier exists in oligopoly.

Competition

High competition in this segment.

Customer/Supplier
Optimizing Tool
Sales
Product variety
Market Share
Examples

There are many customer and two supplier in this kind of segment.
Where the MR=MC, TC<TR.
Use the marketing tools for increasing sales.
All the seller are selling same/different products.
Market share is average in this case.
Pepsi & Coca cola.

Ali Mohsin
Roll No: 11
B.com 5th Eve