Market structures (eco)

• MARKET is a place where buyers and sellers can meet to facilitate the exchange or transaction of goods and services.
• MARKET STRUCTURE refers to the competitive environment in which buyers and sellers operate
• Characteristics of Perfect or Pure Competition give the 6
• 1. There are so many buyers and sellers that each has a negligible impact on market price
• 2. The products sold in the market are homogenous.
• 3. Perfect mobility of resources refers to the easy transfer of resources in terms of use or terms of geographical mobility.
• 4. There is perfect knowledge of economic agents of market conditions such as present and future prices, costs, and economic opportunities.
• 5. The firms can easily enter or exit from the market because there are no significant barriers or special costs to discourage the new entrants.
• 6. Market price and quantity of output are determined exclusively by forces of demand and supply.
• An imperfect market is one in which individual buyers and sellers can influence prices and production, where there is no full disclosure of information about products and prices, and where there are high barriers to entry or exit in the market
• MONOPOLISTIC COMPETITION is characterized as an industry in which many firms offer products or services that are similar, but not exactly alike differentiated in nature
• Characteristics of Monopolistic Competition give the five
• 1. It is a blend of perfect competition and monopoly
• 2. The firms sell differentiated products which are highly substitutable but are not perfect substitutes. Products are not identical, but very similar, so companies use product differentiation.
• PRODUCT DIFFERENTIATION is a marketing strategy that strives to distinguish a company's products or services from the competition. BRAND IDENTITY is one of the selling point of the firms in a monopolistic competition.
• 3. There are free entry and exit in the market that enables the existence of many sellers.
• 4. The firms are engaged in non-price competition.
• 5. It is similar to a monopoly in which the firm can determine the quantity of the products and has some price control.