Four Basic Market Models
Pure/Perfect Competition
Monopolistic Competition
Oligopoly
Monopoly
No control over price
Easy to enter, no obstacles
Standardized products
No price competition
Very large number of firms
Ex: Agriculture
Some control over price, but with narrow limits
Relatively easy to enter
Differentiated products
Emphasis on non-price, rather advertising and trademarks
Many firms
Ex: Retail stores
Limited control over price (Collusion)
Significant obstacles to enter the market
Standardized/Differentiated
Price insensitive by means of differentiation
Few firms
Ex: Steel/Auto industry
Entry is blocked
Public relations advertising
Full price control
Unique products
Ex: Local utilities
One firm only