Topic > Market structure review

The importance of knowledge market structure has always been a vital resource since the advent of globalization. In today's world, the debate on sectors that have their own market specificity is becoming more and more popular: the production of different goods, different sectors of sellers, the size of companies, the characteristics of innovation, the composition and specificity of consumers. We say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay In microeconomics, the most basic market structures are generalized and the behavior of manufacturing enterprises is studied, which leads to obtaining the greatest benefits for them-receiving the maximum profit. All these generalizations are considered a key development, specific recommendations are developed that have an important applied importance in choosing the behavior strategy of the enterprise in specific market characteristics. The subject of the competition evaluation is the branch. For example, a group of competitors who produce goods/services and compete directly with each other. The purpose of the analysis is to identify the "competitive advantages" of the company and the choice of a competitive strategy. There are four main market structures: perfect competition, monopolistic competition, oligopoly and monopoly. Perfect Competition Perfect competition indicates a market structure in which a large number of small firms compete with each other. Furthermore, firms do not have a significant impact on market power. As a result, the producer generally produces the absolute level of output, which in turn causes the market to have many buyers and producers trading homogeneous products so that every buyer and seller is a price taker. Perfect competition is based on the following elements: • All small businesses are focused on maximizing profits. • The goods offered by different sellers are largely typical. • There are no specific preferences between different sellers. It doesn't matter to the customer which company they buy the products from. • All companies have free access and exit to the market. • There is perfect information and knowledge about homogeneous products. Currently, according to Nelson (2017) statistics, 3885567619 people out of the world's population use the Internet. Approximately 3.9 billion Internet users are both producers and consumers. The above example demonstrates that the Internet is a market, where myriad consumers/producers operate without any influence on market power which in turn leads to equal opportunities in this market, exemplifying one of the characteristics of perfect competition. Example of perfect competition. Internet-related industries. The Internet has a strong influence on the perfect competition market because the Internet has made it possible to compare and control prices easily, quickly and efficiently (perfect information). As a result, selling any type of good over the Internet through services like Alibaba, Aliexpress, and E-bay is extremely similar to perfect competition. For example, it is becoming increasingly popular to use the above-mentioned online magazines to compare the prices of any type of product and buy the cheapest ones. Like perfect competition online magazines, namely Alibaba, Aliexpress and E-bay are based on the following elements: • There is also a large number of sellers. • Perfect information and knowledge. It is easy to compare the prices of goods. •There are no significant barriers to entry and exit from the market. Monopolistic Competition Monopolistic competition is a type of market structure consisting of many small firms producing productsdifferentiated and free entry into and exit from the market. The products of these companies are similar, but not completely interchangeable, which means there is a difference in price, features, branding and marketing. By differentiating the product, the monopolistic competitor reduces price elasticity. By increasing the price, the monopolistic competitor does not lose all consumers, as happens in conditions of perfect competition. The market is a bit narrow, however there remain those who consistently prefer products only from this manufacturer. Monopolistic competition is based on the following elements: availability of many sellers and buyers (the market consists of a large number of independent firms and buyers); free entry and exit from the market (no barriers preventing new companies from entering the market) exit from the market);•Differentiated and varied products offered by competing companies. In addition, products may differ from each other in one or more properties (for example, in chemical composition);•perfect awareness of sellers and buyers of market conditions;•influence on the price level, but within a rather narrow Example of monopolistic competition: One of the most convenient examples of monopolistic competition is detergent. There are several companies in Poland such as Ariel, Tide, Ares, Perwoll, Lenor, Vizir, Perlux, Maxi that, FF, Persil, Look, Surf, BioPower, Origami and so on. Accordingly, for the production of new varieties of washing powders it is not necessary to create a large enterprise. Therefore, if companies producing powders will receive large economic profits, this will lead to the influx of new companies into the industry. New companies will offer consumers detergents of new brands, sometimes not very different from those already produced: a new packaging, another color or designed to wash different types of fabrics. OLIGOPOLY The oligopoly market is characterized by the presence on the market of a minimum number of large sellers, whose goods can be homogeneous or differentiated. Entry into the oligopolistic market is extremely difficult, the barriers to entry are very high. Individual companies' control over pricing is limited. Examples of oligopoly can serve the automotive market, cellular communications markets, household appliances, metals. The difference between oligopoly is that companies' decisions about the prices of goods and the volumes of their supply are interdependent. The situation on the market strongly depends on how companies react when the price of a product changes at one of the market participants. Two types of reaction are possible: the first is the reaction, when other oligopolists agree with the new price and set prices for their goods at the same level (they follow the initiator of the price change); the second reaction of ignorance: other oligopolists ignore the price change by the promoting firm and maintain the previous level of prices for their products. Therefore, for the oligopolistic market, a broken demand curve is characteristic. Characteristics and conditions of the oligopoly: • number of sellers in the sector: small; • size of companies: large; • number of customers: large; • goods: homogeneous or differentiated; • price control: significant; • access to market information: difficult ;•barriers to entry into the industry: high;•competition methods: non-price competition, very limited price. Cellular services today are the most profitable and rapidly growing segment of the telecommunications market in Russia. A small number of vendors dominate the Russian mobile phone market, which is one of the most obvious examples of oligopoly. The main players here are MTS, Megafon, Beeline, Tele2. A feature of the Russian cellular market is that it is.