Introduction: There are several market structures in different economies the kind of structure will influence the organization behavior on how they generate profit. Output and pricing decisions are interdependent except the case of perfect completion. Perfect Competition A perfectly competitive market is a market where competitors are much. It is argued that perfect competition would produce the best possible outcomes for consumers and society. Price in this market is equal to the cost of production. Characteristics of perfect competition market:Not the Essay You’re looking for?GET A CUSTOM ESSAY There are no barriers to entry into the market. No single company can influence the market price or market conditions. There will be a large numbers of companies in the market. There is no need for government regulation, except to make markets more competitive. There are assumed to be no external costs or benefits. Oligopoly An oligopoly is a market form or industry dominated by small number of sellers. Oligopolies can result from various forms of collusion which reduce competition and lead to high pricing and consumers. When a market is shared among a few, it is said to be highly concentrated. Although only a few companies dominate, it is possible that many small businesses may also operate in the market. Monopoly Competition. In monopoly where there is many firm producing similar goods but not identical. however, things are different. The monopolist can change the prices, as it is the sole provider of the good and thus has the market power. But here also, if the price increases quantity demanded decreases. Therefore, the monopolist must take under consideration both the positive and negative effects of increase in prices. change the prices, as it is the sole provider of the good and thus has the market power. But here also, if the price increases quantity demanded decreases. Therefore, the monopolist must take under consideration both the positive and negative effects of increase in prices. In another market oligopoly, pricing is a bit more complicated and it depends upon the strategic interaction among the firms.
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