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Monopoly, Oligopoly, Perfect competition, and Monopolistic competition

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What is a market structure?
Define and discuss in detail the differences between a monopoly, an oligopoly, perfect competition and monopolistic competition.
Give real-life examples of each market structure.

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What is a market structure?

Economics uses the phrase "Market Structure" or "Market Form" to illustrate the state of a certain market with reverence of the degree or passion in relations to the competition between consumers on one side and the producers-merchants-sellers on the other. It presents the influence and variables of interactions such as price changes, selling process, and the degree of levels in the production process. There are four basic styles that make up a market structure. This is monopoly, an oligopoly, perfect competition and monopolistic competition (What is market structure, 2013).

Definitions and Differences

Monopoly: This identifies a market that has one individual or company or organization or government, or any other entity that provides are service or product. Thus establishing the parameters for getting into this industry. There may be barriers such as politics, economies, high cost, copy rights and/or patent control.

Oligopoly: This market has a small group of companies or organizations that hold control of a market, thus like in a monopoly, the standard in which it takes to get into this market are typically high. The product or services in this market are very similar in comparison. This makes the competitor interdependent as a result of the market variables.

Perfect competition: This ...

Solution Summary

The solution defines market structure, and outlines the differences between a monopoly, oligopoly, perfect competition, and monopolistic competition. Real-life examples and market structures are also provided.

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Markets for monopolistic competition; market for oligopoly.

This week, we discussed the structure of markets and their two extremes: monopoly and perfect competition. The following questions ask you to describe markets that are between these two extremes.

Describe a market for a good or service that exhibits monopolistic competition. Are firms in a monopolistically competitive market more innovative than a perfectly competitive market or a monopoly?

Describe a market for a good or service that is an oligopoly. How does the structure of this market affect the firms' decision-making?

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