Types of competition

VILNIUS UNIVERSITYKAUNAS FACULTY OF HUMANITIES

Types of Competitions

Student: Gediminas Urbonas VI3Teacher: Dileta Aleksendravičienė

Monopolistic Competition Oligopoly Monopoly Perfect Competition Summary

Contents

There are many producers and many consumers in the market, and no business has total control over the market price.

Consumers perceive that there are non-price differences among the competitors products.

There are few barriers to entry and exit. Producers have a degree of control over

price.

Monopolistic Competition

Monopolistically competitive markets have the following characteristics:

Product differentiation Many firms No entry and exit cost in the long run Independent decision making Some degree of market power

Major characteristics

In many markets, such as toothpastes and toilet paper, producers practice product differentiation by altering the physical composition of products, using special packaging, or simply claiming to have superior products based on brand images or advertising.

Examples

An oligopoly is a market structure in which a few firms dominate. When a market is shared between a few firms, it is said to be highly concentrated.

Oligopoly

Ability to set price High barriers to entry and exit Number of firms Long run profits Product differentiation Perfect knowledge Non-Price Competition

Characteristics

Five banks (Barclays, Halifax, HSBC, Lloyds TSB and Natwest) dominate the UK banking sector, they were accused of being an oligopoly by the relative newcomer Virgin bank

Four companies (Tesco, Sainsbury's, Asda and Morissons) share 74.4% of the grocery market

Examples

A situation in which a single company or group owns all or nearly all of the market for a given type of product or service.

Monopoly

Price Maker: Decides the price of the good or product to be sold.

High Barriers: Other sellers are unable to enter the market of the monopoly.

Single seller: In a monopoly, there is one seller of the good that produces all the output. 

Price Discrimination: A monopolist can change the price and quality of the product.

Characteristics

Examples of monopolies include: Local telephone service Water service Cable television The U.S. Postal Service

Examples

 Perfect competition (sometimes called pure competition) describes markets such that no participants are large enough to have the market power to set the price of a products. 

Perfect competition

A large number buyers and sellers No barriers of entry and exit  Perfect factor mobility  Zero transaction costs Homogeneous products

characteristics

Corn,wheat and other similar products

Examples

Conclusion

https://www.youtube.com/watch?v=8a3gXThQeK0

https://www.youtube.com/watch?v=r2Ueg6sjWAc

Thanks for your attention!