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Market Intervention- Part 2 - Coggle Diagram

- - - - Oiigopoly
        
        The word oligopoly comes from the Greek word "oligos" which means "few". Therefore an oligopoly is a market which is dominated by few large firms. e.g. the market for newspspers. A market dominated by two firms e.g. the market for fast food restaurant burgers, is called a duopoly
      - Monopolistic Competition
        
        Monopolistic Competion is also very common in the real world. One example of monopolistic competition is the clothing industry; there are many other examples.
      - Monopoly
        
        Strictly speaking, a monopolistic is a sole seller, i.e. he/she is the only person selling a particular good or service so there is only one firm in the market. In a monopoly, a monspolistic has the power to influence the market price by controlling the supply. Provided they can keep out potentional competitors, by existence of entry barriers, monopolies have the ability to make high profits. e.g. Scottish Water, MIcrosoft
  - - - A large number of buyers- There are so many different buyers of the product that the actions of one individual buyer cannot affect the market, enough to affect the price.
      - Homongeneous products- Consumers must believe that each suppliers product is identical to those of other suppliers, and they are therefore perfect substitutes for one another. Not only must the goods be the same, they must appear to be the same
      - A Large number of frims (sellers)- there are so many firms that none is big enough to have any influence on the market price. The firms are therefore "price takers" i.e. they have to sell at the price set by the market
      - No barriers to entry or exit- is must be easy for firms to enter and leave an industry
      - Perfect Information- Consumers and producers must have perfect knowledge about what prices are being charged by all firms in the market.