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Market Structures - Coggle Diagram
Market Structures
Perfect Competition
Perfect competition is when there are many businesses competing, but no one is dominant
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Businesses have equal access to technology and have equal levels to productivity and all businesses will benefit in the same way, consumers
As output increases, average cost decreases.
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Monopoly
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Through deregulation and privatisation, these monopolies have in the main disappeared
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Oligopoly
There are many businesses but only a few dominate, each business has differentiated products with strong brand identity
Prices can be stable for long periods, although short price wars do occur, some barriers to entry do exist like high start-up costs for manufacturing.
When businesses act together a cartel is formed, cartels try to keep prices high whilst businesses involved share the market between themselves.
Niche Marketing
When a business targets a smaller segment of a larger market, a higher price can be charger and customers tend to be willing to pay and tend to be loyal, it sells products specialised for its targeted segment.
They are able to concentrate on their strengths and development of products from what the business is good at
Monopolistic Competition
Large number of businesses are in competition with each other, products are similar but differentiated, brand identity is weak, businesses are not price makers
Mass Marketing
Aims at the whole market and not at a particular segment, economies of scale can be taken advantage of because of higher production output capacity
Competition increases as the number of businesses in the market increases, the common structures are