MARKET STRUCTURES

Imperfect Competition vs. Monopoly

Imperfect Competition vs. Monopoly

Monopoly

Pure monopoly (Pure monopoly) - The situation on the market when there is only one seller of the product, which has no close substitutes (Alderson, 2005, 44-53). Monopolistic market is the antithesis of a perfectly competitive market. For buyers, there is only one source of supply - monopoly (Alderson, 2007, 80-83). It is clear that, like perfect competition, pure monopoly is a kind of abstraction Firstly, there is virtually no product with any alternatives. Second, rarely at the national (or global) market is only one seller. Although a more closed markets, for example, in a small town, we can observe the phenomenon of pure monopoly (Bain, 2000, 66-71).

For example, in a city can have only one doctor should be noted that, as a rule, the activities of such monopolies are regulated by municipal authorities and government organizations. The firm has monopoly power (monopoly power) if it has the ability to manipulate the price of its product by altering the amount that it is ready to sell (Baldwin, Krugman, 1988, 112-117).

Firm with monopoly power is a company that at its discretion, determines the price of their goods, rather than accepting it as a given, i.e. in contrast again - still from the competitive seller (Barney, 1991, 99-120). Market structure (market structure) indicates the number of buyers and sellers in the market, their share in the total number of buy and sell goods, the degree of standardization of goods, as well as ease of entry and exit from the market (Bhagwati, 1965, 41-59). Pure monopoly and perfect competition are extreme forms of organization of the market (market structure). Real-world market structures are located between these two extremes.

Imperfect Competition

The term "imperfect competition" was coined by the British economist Joan Robinson, in the 30's. Overall, this type of competition or market rate (as many economists and marketers called) is characterized mainly because it compete from few to several companies that can control to some extent the price of your product (Brander, Spencer, 1984, 301-317). Consequently, it is the kind of market where the vast majority of competing companies and products. It is therefore highly desirable to marketers know what the definition of imperfect competition, what are the characteristics that differentiate and what are the types of imperfectly competitive markets.

Economic definition: A market situation in which many vendors, each with a relatively small market share, competing for consumer patronage. Environments definition: The market conditions in which firms have some control, but not necessarily absolute control over price, by using techniques such as product differentiation and limited supply (Brown, 1987, 503-526). Monopoly, oligopoly and monopolistic competition are examples of imperfect competition.

The imperfectly competitive market has the following features that distinguish it from other types of competition or market:

Sellers can control to some extent the price of your product. However, this discretion (the price) varies from one industry to another. For example, in personal computer sales, just a price difference of a few percentage points to sales of a ...