Market

Is a place where buyers and sellers are exchanging goods and

services with the following considerations:
1.Types of goods and services being traded;
2.The number and size of buyers and sellers in the market; and
3.The degree to which information can flow freely.
TWO TYPES OF MARKET STRUCTURES
1. Perfect Market
a market situation which consists of a very large number
of buyers and sellers offering a homogenous product.
CHARACTERISTIC OF PURE COMPETITION
large number of sellers
standardized product (identical or homogenous)
easy entry and exit
no artificial restrictions
Firms are “price takers”
no non-price competition
2. Imperfect Market
a market situation wherein the conditions necessary for
perfect competitions are not satisfied. Under this situation, there are
few sellers which are enough to affect the market price.

MONOPOLY Greek word “monos” means one and “polien” means to sell

a market situation where there is only one seller or producer

supplying unique goods and services.

CHARACTERISTICS OF PURE MONOPOLY

The market is consists of a single seller.

The sellers sell a product for which there is no close substitute.

Barriers to entry

The seller can control the price of his or her product.

no non-price competition
MONOPOLISTIC COMPETITION
a market situation in which there are many
sellers producing highly differentiated
products.

CHARACTERISTICS OF MONOPOLISTIC COMPETITION

A large number of buyers and sellers in a given market act independently

Differentiated products

There is a limited control of price because of product differentation.

Relatively easy entry in the market.

There is a non-price competition
OLIGOPOLY
a market situation in which there is a small number
of sellers, each aware of the action of the other.

CHARACTERISTICS OF OLIGOPOLY
there is only a few no. of sellers

the firm has control over the price

standardized or differentiated products

extreme difficulty for new competitors to enter the market

substantial non-price competition