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Que: Discuss different types of market structure and make a meaningful

comparison.

Ans:
Different types of market structure include:
1. Pure competition
2. Pure monopoly
3. Monopsony
4. Monopolostic competition
5. Oligopoly
6. Oligopsony
7. Price discrimination
-These market structures are discussed below.

1.Pure competition:
The market consist of buyers and sellers trading in a uniform commodity such
as wheat, copper, or financial securities. No single buyer or seller has much effect on
the going market price. A seller can not change more than the going price, because
buyer can obtain as much they need at the going price. In a purely competitive
market, marketing research, product development, pricing, advertising, and sales
promotion play little or no role. Thus, sellers in these markets do not spend much time
on marketing strategy.

2.Pure monopoly:
In economics, an industry with a single firm that produce a product, for which
there are no close substitutes and in which significant barriers to entry prevent other
firms from entering the industry to compete for profit is called pure monopoly.
Example: When the ‘City Cell’ mobile service company first started their business in
Bangladesh, they were the only mobile service provider then. Before the ‘Grameen
Phone’ came into the market, they enjoyed pure monopoly.
There are two types of pure monopoly: 1. Regulated monopoly
2. Nonregulated monopoly
Regulated monopoly: The government permits the company to set rates that
will yield a “fair return”. Example: Power Company.
Nonregulated monopoly: Company is free to price at what the market will
bear. Example: ‘City Cell’ ( When it first introduced mobile service in Bangladesh).

3.Monopsony:
This is the market situation where there is only one buyer in the market. When
City Cell first introduced mobile service network in Bangladesh, they were the only
mobile phone and its accessories buyer from Nokia and Motorolla in Bangladesh.

4.Monopolistic competition:
In economics, the market consist of many buyers and sellers who trade over a
range of prices rather than a single market price is called monopolistic competition. A
range of price occurs because sellers can differentiate their offers to buyers. Sellers try
to develop difference by using – customer segments, and in addition to price, freely
uses branding, advertising, and personal selling to set their offers apart.

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5.Oligopoly:
In economics, the market consist of few sellers who are highly sensitive to
each other’s pricing and marketing strategies. There are few sellers because it is
difficult for new sellers to enter the market. Each seller is alert to competitor’s
strategies and move.

6.Oligopsony:
In economics, oligopsony is a market where there is a small number of buyers
for a product or a service. In this market structure, buyers have power over the seller.
Because as there are small number of buyers, if they are united and pressure the seller
to sell the product or service in a reasonable and affordable price, the seller must have
to consider that.

7.Price discrimination:
In economics, if one product or service has different price for different buyers
which is provided by the same provider, then we call that price discrimination market
strategy. A good example of this strategy could be the airlines company-“Emirates”. It
has offered different prices for different category of passengers for the same
destination. Such as, it has “Student package” for the students, “Honeymoon package”
for the couples which are of lower price than their regular one.

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