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COMPETITION AND TYPES OF COMPETITION (MONOPOLY (NATURAL MONOPOLIES…
COMPETITION AND TYPES OF COMPETITION
THE MARKET
PERFECT COMPETITION
No barriers to entry
Many consumers buying a standardized product
from numerous small businesses
Price taker, because of the other prices from other companies.
Many markets producing the same product.
MONOPOLISTIC COMPETITION
Companies have limited control over price
Free entry and exit
Companies offering the same products, but with a little difference
MONOPOLY
Not necessary to be an entire country (geographical area)
LEGAL MONOPOLIES
patents allow to have a monopoly in a certain period of time
Other companies can't produce the same If that's produced before
Huge barriers of entry
One seller in the market
NATURAL MONOPOLIES
Barriers to entry
They’re required to serve all
customers
Public utilities
Huge investments
Regulated by the government
Lack of innovation
Place where the sellers of a particular product can meet with the buyers of that product.
¿who decide what to produce?
Suppliers decide which products are produced and at which price.
OLIGOPOLY
Cost of starting a business is usually high, because of the low number of firms entering
Companies some control over the prices
Few sellers in the market.
Products fairy similar
Competitive, so when one companies lowers prices, the others tend to do the same
