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Comparison Of Oligopoly, Monopoly And Perfect Competition

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Oligopoly, Monopoly and perfect competition are three market structures that exist in the market. Determination of price is one of the most crucial aspects of the market. Different market structures allows the company to determine different prices and output determination
Monopoly: When one firm is the sole producer or seller of a particular product with no close substitute, monopoly is said to exist. In monopoly, there is single producer or seller creating monopoly in the market, hence the price and output is determined by the producer.
Monopolistic competition: In monopolistic competition, many firms offer services and products that are similar. Although the products are not perfect substitute and the barriers to exist and entry are low. In monopolistic competition, decision of one firm does not affect the decision of competitors and all firms enjoy same degree of market power i.e. all producers play significant role in price and output determination (Baldwin & Scott, 2013).
Oligopoly: In oligopolistic market structure, a few firms exist and dominate the market. The market is highly concentrated because the market is shared between a few firms. The small firm enjoys large volume of market share. It is somewhat similar to monopoly, except instead of one firm a few firms operate and dominate the market. Due to small …show more content…

In the recent years, international trade has flourished which has impacted the organisations significantly. For each country, worldwide trade is significant as it is impossible and unrealistic for all the nations to manufacture and deliver all the merchandise or benefits within the country. In a few nations, some merchandise is accessible, therefore for the countries, to acquire the products and services which they cannot develop, it is necessary to conduct international trade. International trade is profitable and economic for the organisations (Hamilton & Webster,

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State of limited competition, in which a market is shared by a small number of producers or sellers. Meaning the market only has a handful of companies functioning in the same structure. The substitution of a product for another product or one vehicle for another it is completely possible in an Oligopoly market only from one of the few companies in the Oligopoly market structure. In the United States these companies would include Ford, GM, and Chrysler (Grunert n.d.). It is extremely difficult for any new Company wanting to enter into an Oligopoly market structure.

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The oligopoly market is set up in a way so that competitors can survive because each is unique and there are so few competitors that they are virtually indispensable even if some ethics atrocity

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