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Market Structure - Economics

Market Structure - Economics

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Published by: ABARAJ on Jul 07, 2012
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12/24/2012

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market structure
is the number of  firms producing identical products.The types of market structures include the following:
 
Monopolistic competition,also called competitive market, where there is a large numberof firms, each having a small proportion of the market share and slightly differentiatedproducts.
 
Oligopoly,in which a market is dominated by a small number of firms that togethercontrol the majority of the market share.
o
 
Duopoly,a special case of an oligopoly with two firms.
 
Monopsony,when there is only one buyer in a market.
 
Oligopsony,a market where many sellers can be present but meet only a few buyers.
 
Monopoly,where there is only one provider of a product or service.
o
 
Natural monopoly,a monopoly in which economies of scale cause efficiency to increase continuously with the size of the firm. A firm is a natural monopoly if itis able to serve the entire market demand at a lower cost than any combination of two or more smaller, more specialized firms.
 
Perfect competition,a theoretical market structure that features no barriers to entry,an unlimited number of producers and consumers, and a perfectly elastic demand curve.  The imperfectly competitive structure is quite identical to the realistic market conditions wheresome monopolistic competitors, monopolists, oligopolists,and duopolists exist and dominate the market conditions. The elements of Market Structure include the number and size distribution of firms, entry conditions, and the extent of differentiation.These somewhat abstract concerns tend to determine some but not all details of a specificconcrete market system where buyers and sellers actually meet and commit to trade.Competition is useful because it reveals actual customer demand and induces the seller (operator) to provideservice quality levels and price levels that buyers (customers) want, typically subject to the
seller’s financial need to cover its costs. In other words, competition can align the seller’sinterests with the buyer’s interests and can cause the seller to reveal his true costs and other 
private information. In the absence of perfect competition, three basic approaches can be adoptedto deal with problems related to the control of market power and an asymmetry between thegovernment and the operator with respect to objectives and information: (a) subjecting theoperator to competitive pressures, (b) gathering information on the operator and the market, and(c) applying incentive regulation.
 
Quick Reference to Basic Market Structures
 
MarketStructureSeller EntryBarriersSellerNumberBuyer EntryBarriersBuyerNumber
No Many No ManyOligopolyYes Few No ManyOligopsonyNo Many Yes Few
 
Quick Reference to Basic Market Structures
 
MarketStructureSeller EntryBarriersSellerNumberBuyer EntryBarriersBuyerNumber
MonopolyYes One No ManyMonopsonyNo Many Yes OneThe correct sequence of the market structure from most to least competitive is perfectcompetition, imperfect competition, oligopoly, and pure monopoly.The main criteria by which one can distinguish between different market structures are: thenumber and size of producers and consumers in the market, the type of  goods and services being traded, and the degree to which information can flow freely. http://www.scaruffi.com/politics/gnp.html
 
Country GNP Per Capita
USA $10,533 $38Japan $4,852 $38Germany $2,242 $27Britain $1,544 $26France $1,543 $26China $1,329 $1Italy $1,260 $22Canada $760 $24Brazil $715 $4Spain $651 $16Mexico $578 $6South Korea $515 $11India $510 $0.5Australia $444 $24Netherlands $429 $27
 
Taiwan $363 $16Argentina $300 $8Switzerland $286 $39Sweden $275 $31Belgium $264 $26Russia $252 $2Austria $226 $27Turkey $212 $3Poland $188 $5Indonesia $174 $0.8Thailand $132 $2
Country
% of Global GDP
 
% of World Population
 
USA 32.9% 4.65%Japan 13.4% 2.09%Germany 6.0% 1.36%Britain 4.6% 0.99%France 4.2% 0.97%China 3.7% 20.84%Italy 3.5% 0.95%Canada 2.3% 0.51%Mexico 2.0% 1.62%Spain 1.9% 0.65%
Purchasing-power parity (2003)
Rank Country PPP total PPP/capita Population($ billions) ($) (million)
European Union 10,840 28,600 3791. USA 10,400 37,600 290

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