Question

There are four market structures - perfect competition, monopolistic competition, oligopoly, and monopoly.

1. Visit a retailer that you feel has the characteristics that are most close to the monopolistic competitive market structure. *** Due to self-isolation from the virus, you can recall from memory or conduct research.

a. Provide the name and location of the retailer (You can use online retailers. If you do, provide the website).

b. Describe its characteristics and how they differ from a perfect competition market structure.

2. Visit a retailer or business that you feel has the characteristics that are most close to an oligopoly market structure. *** Due to self-isolation from the virus, you can recall from memory or conduct research.

a. Provide the name and location of the retailer or business (If you use online organizations, provide the website).

b. Describe its characteristics and how these differ from the characteristics of a monopoly.

Answer 1

1. Answer:-

a. Example of monopolistic competitive market are

Online - Amazon

Offiline- In India big bazaar, In USA Target, dollar1 are the examples of monopolistic competitive market. You can take any supermarket at your region where you can do groceries shopping.

In this market we find varieties of product which are differentiated. Same product but differ from each other at size, colour , shape etc. Like for example shampoo. Their are varities of brand like L'oréal, dove, TRESemmé etc all are different but purpose of all of them are same i.e. cleaning hair.

b. The monopolistic competitive market are different from perfect competition market structure on the following ground

i. Natureof the product: Under perfect competition the products are homogeneous. But under monopolistic competition products are heterogeneous

ii. Selling cost: There is no selling cost under perfect competition whereas there is a heavy selling cost under monopolistic competition

iii. Price: Under perfect competition firms are price taker as price is determined by the industry but under monopolistic competition firms have partial control over price due to product differentiation.

iv. Demand curve: Under perfect competition demand curve is perfectly elastic on the other hand under monopolistic competition demand curve slopes downwards.

2.Answer : - The example of oligopoly markets are , automobile, cement, OPEC( organisation of petroleum exporting countries) etc. There are few firms selling homogenous or differentiated products. For e.g automobile companies, cement, steel etc.

The few name's of oligopoly markets are TOYOTA, TATA, Volkswagen etc are the oligopoly automobile companies.

You can take the location of any car showroom.

b. The difference between oligopoly markets and monopoly market

i. Monopoly has single seller but few big sellers.

ii. No close substitutes under monopoly whereas products are homogeneous under pure oligopoly and differentiated under differentiated oligopoly.

iii. Monopoly has downward sloping demand curve( less elastic). Oligopoly has indeterminate demand curve.

iv. Under monopoly only informative selling cost are incurred but under oligopoly huge selling costs are incurred.