Pure Competition Vs Oligopolistic Competition

Presented by: Tayyaba Latif

Pure Competition
 Earliestkind of competition
 Large number of buyers and sellers
 Products are homogenous
 Freedom of entry and exists of buyer and

sellers
 Exceptionally small competitors
Pure Competition
In pure competition
1. Market expenses are determined by means of
consumer demand
2. No supplier has any influence over the
marketplace price
3. Suppliers are price takers
4. Low barrier of entry into the business
Characteristic of pure competition

Large number of buyers and sellers

 price is decided by the company
 company is a price taker
Homogenous products

 Products are homogeneous

 No single supplier’s product is preferred to

that of every other seller

 Products are consequently indistinguishable

from each other

 Firm can promote product at the best price
Free entry and exit from industry

 No regulations as such on the entry and go out

of the firms
The firm in the pure competition

 Competitive market
 Large number of distinctly small firms
 No single firm can influence the market price
 The equilibrium price inside the market falls,

the equilibrium quantity will upward thrust.

Profits in the Long Run Pure Competition

 In the long term, manufacturers are able to

alter their scale of plant
 Relative ease of exit and access from the
marketplace
 Longer-term pure competition is that the
demand confronted with the help of the
company is perfectly flexible on the
marketplace price.
Oligopolistic Competition
 Few companies
 Promotion of products

1. Homogeneous
2. Differentiated
 Supplier influences the conduct of alternative

companies
 Some fantastically big and few smaller

competitors
Characteristics of oligopolistic competition

Few firms
 Big businesses
 Exact wide variety of firms is undefined
 Intense competition
Barriers to Entry

 Barriers
to entry
Example: patents, licenses, manage over crucial
raw substances
Non-Price Competition

 Keep away from price competition

 Non-price methods

1. Advertising
2. After income offerings
3. Warranties
Interdependence

 lotof interdependence amongst firms

For example: firm takes under consideration the
action and response of its competing firms at
the same time as figuring out its price and
production choices.
Nature of the Product

 The products are

1. homogeneous
2. differentiated.
Selling Costs

 Interdependenceamong companies
 Promoting costs are particularly vital for

competing
No unique pattern of pricing behavior

 Companies want to act independently

For example : the firms can compete or collude
with different companies which could cause
distinctive pricing situations.
Indeterminateness of the Demand Curve

 isn'talways feasible to determine the demand

curve of a company
 large interdependence among rivals

For example: Competing firms can react in

unique methods whilst company adjustments
its price and that makes the call for curve
indeterminate.
Firms’ behavior
 Stable prices
 Price wars
 Approval for higher operating expense
Thank you