Question

Define the four product markets with at least one example of each example. How is the oligopoly market different from the other three types of market?

Answer 1

Answer--There are four procuct markets --

1.Perfect Market Competition-It is the condition in which producers are price takers and in perfect market competiton commodities are identical in nature and a single seller cannot inflence the price of the commodity in this market condition.

Example-In agriculture market there is sale of identical products like potato ,carrot,grains by a large number of sellers at a one place at one time.

2.Imperfect Competition-Imperfect competition market is a type of market where there are large numbers of sellers but they sale heterogenous products which are dissimilar in nature.In imperfect competition market sellers can influence the price of the commodity hence sellers are price maker in this market condition.

Example--The resturent business,pubs, hotels are the examples of imperfect competition market.

3.Oligopoly Market--It is the market situation in which a market or industry is dominated by the small group of large sellers.and in this market there is no free entry and exit of the firms,there is a barriers for entry of firms in this market.

Example-Automobile sector is example of oligopoly market in which there is small groups of large sellers.

4.Monopoly Market--It is the market condition in which market is dominated by the few firms and there is no competition among the producers for the commodity,in momopoly market producers are the price maker.

Example--Software businesses,railways etc are the monopoly market examples.

Oligopoly is different from the other three market structures because oligopolies have their own market structure . Due to the number of few sellers in this market , each oligopolist is likely to be aware of the actions of the others.which is not possible in case of others three market conditions.