Aditya Yadav

SA LES M A NA G EM ENT
• BBA
• 4th Sem
 Types of Market
Structures

▶ Pe rfe c t C o m p e tito n
▶ M o no p o listic
C o m p e tition
▶ Oligopoly
▶ Mon op ol y
 Oligopoly

▶ In a n oligopoly, there are only a few firms in the market. While there is
no clarity about the number of firms, 3-5 dominant firms are
considered the norm. So in the c a s e of a n oligopoly, the buyers are far
greater than the sellers.
▶ The firms in this c a s e either com p e te with another to collaborate
together, They use their market influence to set the prices a n d in turn
maximize their profits. So the consumers b e c o m e the price takers. In a n
oligopoly, there are various barriers to entry in the market, a n d new firms
find it difficult to establish themselves.
 Monopolistic
Competition

▶ This is a more realistic scenario that actually occurs in the real world. In
monopolistic competition, there are still a large number of buyers as well
as sellers. But they all d o not sell h om oge n e ous products. The products
are similar but all sellers sell slightly differentiated products.
 M onop oly

▶ In a monopoly type of market structure, there is only one seller, so a

single firm will control the entire market. It c a n set any price it wishes
since it has all the market power. Consumers d o not h a v e any
alternative a n d must p ay the price set by the seller.
▶

▶ Monopolies are extremely undesirable. Here the consumer loose all their
power a n d market forces b e c o m e irrelevant. However, a pure monopoly
is very rare in reality.
 Perfect
Competiton

▶ In a perfect competition market structure, there are a large number of

buyers a n d sellers. All the sellers of the market are small sellers in
competition e a c h other. There is n o o n e big seller with a n y
significant influence on the market. So all the firms in such a market are
price takers.